Dairy prices up 1.9pc in Fonterra auction

Dairy commodity prices firmed 1.9 per cent overnight at Fonterra's online auction, with the average selling price for all contracts, across all product lines, rising to US$3663 ($5011) a tonne.

This followed a sharp rise of 16.9 per cent in the last auction a fortnight ago, which reversed declines over the previous four months.

Prices paid for the core product, whole milkpowder, rose 1.4 per cent this morning to US$3602/tonne.

The price gains add to the 17 per cent jump in the last auction a fortnight ago after four straight months of decline that pushed the price of whole milk powder below US$3,000 a tonne.

Fonterra last month affirmed its forecast payment to farmers at $6.90 to $7.10 per kilogram of milksolids while announcing a record 2.1 million tonnes of dairy exports for the year ended July 31, helped by demand from China and Russia.

Fonterra directors said there were signs prices would improve later in the year.

There were 127 bidders participating in the sale, with 73 winners after 10 rounds.

- NZPA / BusinessDesk