Milk powder price rises another 5.7% at Fonterra auction; up 65% from July low

The average price for whole milk powder in Fonterra's Global Trade monthly online auction rose another 5.7% or US$164 a tonne to US$3,022 a tonne, its highest level since February 2008. The price is now up 65% from its low of US$1,829 set on the auction on July 2. Prices ranged from US$2,825 to US$3,095 per tonne. Fonterra Global Trade Managing Director Kelvin Wickham said he expected prices to consolidate after the recent sharp rises. "We've seen a rebalancing in the market and we see market fundamentals supporting prices around their current levels," Wickham said. "In particular there's been keener demand from customers and a tighter supply situation for most products," he said. Wickham said there remained a level of uncertainty given many economies were only beginning to recover from recession. "With prices at these levels we hope to see reduced subsidies and intervention by overseas governments," he said.