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3 months ago
UPDATE 1-Global dairy prices rise for third auction in a row
April 18, 2017 / 9:42 PM / 3 months ago

UPDATE 1-Global dairy prices rise for third auction in a row

2 Min Read

 (New throughout, adds details, analyst comment, market
reaction)
    By Charlotte Greenfield
    WELLINGTON, April 19 (Reuters) - Global dairy prices rose
for the third time in a row at an international auction on
Wednesday, bolstering hope that last year's recovery is back on
track.
    The GDT Price Index climbed 3.1 percent, with an average
selling price of $3,139 per tonne, in the auction held in the
early hours of Wednesday morning. The index had risen 1.6
percent at the previous sale.
    Farmers and analysts had been concerned that after two years
of declining prices, a 50 percent rebound during 2016 could be
temporary since prices were dented at the beginning of the new
year as global supply increased.
    But heavy flooding in New Zealand, the world's largest dairy
exporter, was pointing to tighter supply.
    "The recent very poor weather has raised concerns about
production in the near term, and this is likely to have given
prices a lift," said Satish Ranchhod, Senior Economist at
Westpac Bank.
    "Although prices remain lower than the levels that we saw in
early 2017, they appear to have found a floor," he added.
    Prices for whole milk powder rose 3.5 percent, while skim
milk powder fell 7.1 percent.
    A total of 22,927 tonnes was sold at the latest auction, an
increase of 1.3 percent from the previous one, the auction
platform said.
    The auction results can affect the New Zealand dollar       
as the dairy sector generates around 7 percent of the nation's
gross domestic product.
    The Kiwi rose 0.4 percent to a more than two-week high of
$0.7046 after the auction.
    GDT Events is owned by New Zealand’s Fonterra Co-operative
Group Ltd         , but operates independently from the dairy
giant. U.S.-listed CRA International Inc          is the trading
manager for the twice-monthly Global Dairy Trade auction.
    The auctions are held twice a month, with the next one
scheduled for May 2.

 (Reporting by Charlotte Greenfield; Editing by David Gregorio)
  

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