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Dairy market picks up

Global dairy expoter Fonterra has announced it expects to see the dairy market rally after a year during which prices tumbled.

Fonterra’s internet-based sales platform, globalDairyTrade, concluded its September trading event this morning (NZT) with average prices for Whole Milk Powder up 24.2%.

The trading manager, CRA International, advised Fonterra that the average price achieved across all contracts and contract periods for Whole Milk Powder (WMP) was US$2,858 per tonne FAS. This was US$557 per tonne higher than the August event. Prices ranged from US$2,765 per tonne FAS to US$2,940 per tonne FAS.

Kelvin Wickham, managing director, Fonterra Global Trade, said the lift was higher than expected.

“However, we anticipated whole milk powder prices would lead the recovery because of low global inventories and firming demand.”

“With demand returning, our customers have more confidence in refilling their supply chains. But it remains to be seen whether demand has returned to sustainable growth.”

Mr Wickham said that from November 3 globalDairyTrade trading events would include anhydrous milk fat (AMF), in line with plans to offer an expanded range of products.

“This will provide for AMF the same transparent market price that globalDairyTrade is already providing for WMP,” Mr Wickham said.

The next globalDairyTrade trading event will be held on October 6 2009. See www.globalDairyTrade.info for more details.

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