Wellington, April 2 - International dairy prices have risen for the second month in a row, New Zealand's Fonterra Cooperative Group Ltd said on Thursday, in the latest sign that the global market may be stabilising.
Fonterra, the world's biggest dairy exporter, said the average selling price for whole milk powder (WMP) in an Internet auction that concluded on April 1 was $2,235 a metric tonne, up 3.6 percent on a month ago.
That compared with a 16.6 percent rise at March's auction and an 8.8 percent drop in February. Prices had been falling since the auctions were started in July last year.
"The firmer prices we're seeing are encouraging and indicate that supply and demand fundamentals are coming back into balance," said Kelvin Wickham, Fonterra's Managing Director of Global Trade.
The auctions offer a one-month contract with delivery starting two months after the auction, and two three-month contracts with three- and six-month delivery dates.
Last month, Fonterra reaffirmed its forecast payout to dairy farmers of NZ$5.10 a kilo of milk solids in the 2008/09 season, with a lower exchange rate helping to offset weaker commodity prices.
It paid a record NZ$7.90 a kilo in the 2007/08 season.
Fonterra is owned by nearly 11,000 farmers and controls about a third of the world's dairy exports. It generates more than 7 percent of New Zealand's gross domestic product and has annual sales of around NZ$17 billion. ($1=NZ$1.76)