A massive spike in prices was seen by Fonterra's online trading platform globalDairyTrade early this morning.The monthly trading event for April concluded with the average price for whole milk powder (WMP) up 21% to $US3969, edging the price closer to rec
A massive spike in prices was seen by Fonterra’s online trading platform globalDairyTrade early this morning.
The monthly trading event for April concluded with the average price for whole milk powder (WMP) up 21% to $US3969, edging the price closer to record global highs experienced two years ago before plummeting to less than $US2000 less than a year ago.
Platform manager Paul Grave said demand was strong for all products traded on the platform and prices reflected tightening supply as the Australiasian production season drew to a close.
Anhydrous milk fat (AMF) was also up to nearly 22% above the price reached last month to $US4827 while skim milk powder (SMP) climbed 25.5% to $US3672 per tonne.
Mr Grave said the concern has switched overnight from being demand driven to supply driven which had a positive impact on prices.
“Customers seem to be habouring some supply concerns and are prepared to pay to secure product,” he said.
However, Mr Grave said it was hard to predict what the price spike would mean to prices in coming months.
“Customers aren’t buying everything they need. They’re getting a proportion of product to hedge their risk.”
Mr Grave said the market was also continuing to try and find a balance between supply and demand.
While milk supply was winding down in New Zealand and Australia and has also been affected by other factors including dry conditions in the north of the country, Mr Grave said the European Union was approaching its seasonal peak.
He said milk producers there would watch the improving price of WMP with globalDairyTrade and could shift more milk into the product to feed the demand.
