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UPDATE 1-Global dairy prices rise for fifth time in a row
May 16, 2017 / 9:57 PM / 7 months ago

UPDATE 1-Global dairy prices rise for fifth time in a row

 (.)
    By Charlotte Greenfield
    WELLINGTON, May 17 (Reuters) - Global dairy prices rose for
the fifth time in a row in fortnightly auctions, putting to rest
any jitters that a recovery in dairy in 2017 was temporary.
    The Global Dairy Trade Price Index climbed 3.2 percent, with
an average selling price of $3,313 per tonne, in the auction
held in the early hours of Wednesday morning.
    After two years of declining prices, farmers and analysts
had been concerned that a 50 percent rebound during 2016 could
be temporary. Prices were also dented at the beginning of the
new year as global supply increased.
    Much of the gain was for high-fat products such as butter,
which rose 11.2 percent, as demand from Asian markets increased.
    "Strong demand for milkfat is attributed to many consumers
in developed nations eating more natural foods rather than
artificial or processed foods," said Amy Castleton, analyst at
AgriHQ.
     "Some of the poorer nations are also developing a taste for
butter. Cakes and cream are being consumed more often by wealthy
Asians," she added.
   Prices for milk powder also rose, though more modestly. Whole
milk powder prices gained 1.3 percent while skim milk powder
prices grew 1 percent.
    A total of 21,236 tonnes was sold at the latest auction,
falling 6.2 percent from the previous one.
    The auction results can affect the New Zealand dollar
         as the dairy sector generates more than 7.0 percent of
the country's gross domestic product.
    However, market reaction was relatively muted, with the Kiwi
currency rising from $0.6868 to $0.6894 after the auction, but
then tracing back down to around $0.6885.
    GDT Events is owned by New Zealand’s Fonterra Co-operative
Group Ltd         , but operates independently from the dairy
giant.
    The auctions are held twice a month, with the next one
scheduled for June 6.

 (Reporting by Charlotte Greenfield)
  

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