New Zealand dairy prices rise in latest auction in midst of supply concern

GlobalDairyTrade auction saw prices rise 4.9 percent, including a strong rise in whole milk powder prices. In the previous auction, prices had risen 2.2 percent.

There were strong gains in prices for most products, including a 5.1 percent rise in whole milk powder prices and 6.5 percent in skim milk powder prices. Prices have been stimulated by worries about supply after recent dry conditions in New Zealand.

Fonterra recently announced that they anticipate production to fall 3 percent this season. According to a Westpac research report, the 2017/18 payout is expected to be $6.20/KgMs.

“Tightness in supply suggests some upside risk to our forecast. However, this is balanced against concerns about easing demand in key markets like China”, added Westpac.

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