Is the glass half full or half empty is the phrase that sums up the reporting of the latest globaldairytrade auction result. Whilst in US$ the prices are up when the appreciating currency is allowed for, the price in NZ $ is back. However I am one of the analysts that will focus on increased demand for the product, which has seen a rise in value which may show we have reached the bottom of the dairy commodity cycle. I'm sure all dairy farmers will be pleased with this result and will be hopeful of more to come. The average price for whole milk powder in Fonterra's latest globalDairy Trade internet auction rose 3.5% in April from March to US$2,235/tonne. This was the second consecutive month in which the average price rose, following a 16.6% rise in March from February, up from a low of US$1,851/tonne. (Update 1 to include comments from Fonterra.) The biggest average price rise in the latest auction came for milk powder for delivery between June and September, up 4.8% to US$2,322/tonne. The price for milk powder for deliveries between October and December rose 4.6% to US$2,254 and the price for June deliveries was up 0.9% to US$2,133. "The firmer prices we're seeing are encouraging and indicate that supply and demand fundamentals are coming back into balance," Fonterra's Managing Director of Global Trade Kelvin Wickham said."It's encouraging to see some stability in the market and while some economic risks remain, we are positive about the medium-term outlook," Wickham said. Prices at the auctions had fallen since they began in July 2008 and had fallen 58% before they began to rise in March.
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