Dairy prices rise 16pc at latest online auction

Finally, an internet dairy auction that shows some promise.

Fonterra said today that international dairy prices rose in its latest monthly internet auction after a lengthy period of decline.

In the latest auction early today, the average selling price for whole milkpowder rose 16.6 per cent from a month earlier to US$2158 ($4415) per tonne, Fonterra said.

Prices ranged from US$2100 per tonne to US$2280 per tonne.

Fonterra managing director of global trade Kelvin Wickham said the result reflected what customers believed was a fair price in today's uncertain market.

"This latest result is another indicator of what are seeing in the market. We expect prices to move around in this transition period as supply and demand rebalances."

In February the average selling price for whole milkpowder had fallen 8.2 per cent to US$1851, a level Mr Wickham said at the time was "not sustainable for global suppliers".

The internet auction prices fell 9.3 per cent in January's auction and 14 per cent in December.

In its morning briefing today, ANZ heralded the latest auction price with the comment "finally, some positive news on the local front", saying the increase looked promising.

Factoring in the fall in the NZ dollar during the past month, the increase in local currency terms was a "respectable" 20 per cent, ANZ said.

"To be sure, we are still a long way off the peaks. But last night's auction could be an early indication that perhaps the bottom of dairy prices has been found."

- NZPA