The average price for all whole milk powder products sold during Fonterra's May internet auction fell 4.1% from the previous auction a month ago, after improving in March and April. The average price of US$2,144/tonne was 51.2% below its peak in July last year when the auctions began. "Today's result confirms our expectation that dairy markets will be characterised by increased uncertainty in the future and we expect prices will continue to cycle around current levels," Fonterra Global Trade Portfolio Optimisation Director Nigel Kuzemko said. "Still, globalDairyTrade continues to achieve its goal of being an accepted reference point for global dairy prices, with last night's trading event attracting strong international interest and a record number of participants," Kuzemko said. Despite the overall fall, the average price for milk powder shipments to be sent from New Zealand in the first contract period (July in this case) was up 1.6% from April at US$2,168/tonne. This was the third consecutive month, and fourth in five months, that the average price for initial shipments following the auction rose, reaching a six month high, 42% below its peak in July. However, the average price for milk powder shipments in the second contract period, in this case shipments from New Zealand in August to October, fell 6.9% from April, to US$2,162/tonne. The contract period 2 price had risen in March and April but fell back to being 46% below its July peak.
The average price in contract period 3 (shipments made between November and January) also fell, by 6.3% from April to US$2,113/tonne. It fell back to sitting 44% below its peak. There were 4,000 tonnes of milk powder offered for the July shipments; 5,000 tonnes for the August-October shipments; and 6,000 tonnes for the November-January shipments. Between the April and May auctions, the New Zealand dollar rose about 7% from 56 USc on April 1 to 60 USc on May 12. In New Zealand dollar terms, the average price fell about 9% between the two auctions.
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