International milk powder price surges to a record

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International milk powder price surges to a record

 

Whole milk powder prices surged to a record on sustained demand from China and concerns in rising input and feed costs may curb supply, potentially boosting inflation. Powder gained 15% to $4,958 a tonne from two weeks earlier, the highest level for the near-term contract since auctions began in July 2008, according to Auckland-based (New Zealand) Fonterra Cooperative Group Ltd. Prices soared 41% in the past three months , buoyed by demand from Asia and concern of a dry spell in New Zealand may limit output

Demand was outstripping supply at the moment and there’s still some risks what the supply situation was going to do, said James Shortall, a rural economist at ASB Bank Ltd in Auckland. Rising dairy prices might spur supply sustainability, said Bruce Donnison , Fonterra general manager, in Canberra. The dairy market in West Asia and Asia was growing at about 4-5% a year and markets were likely to remain strong as rising incomes boosted demand, according to Donnison. India could represent the next major growth area in the region after China. Whole-milk powder for delivery from June through August rose 12.3%, he added.

-- Bloomberg

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