Wellington, Aug 5 - New Zealand's Fonterra Cooperative Group, the world's top dairy exporter, said international dairy prices surged at its latest auction, recovering after a recent run of falls.
Fonterra said the average selling price for whole milk powder in an Internet auction on Wednesday was $2,301 a metric tonne, up 26 percent on a month ago.
That compared with a 3 percent fall in July, the third month in a row of prices had fallen in the auction.
"We are seeing signs of strengthening demand and prices, and that's encouraging, but the market remains dynamic with trends difficult to forecast," said Fonterra's Director of Commercial and Strategy for its Trade and Operations division, Nigel Kuzemko.
Full details of the auction are available at www.globaldairytrade.info.
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. The next auction will be held on Sept. 1.
Last week Fonterra maintained its forecast payout to dairy farmers of NZ$4.55 a kilo of milk solids in the 2009/10 season, saying signs of stabilisation in dairy markets were offset by a higher New Zealand dollar.
It paid a record NZ$7.90 a kilo in the 2007/08 season, and is expecting to pay NZ$5.20 in the current season.
Dairy products account for around a quarter of New Zealand's export earnings, which touched NZ$43.4 billion ($29.1 billion) in the year to May 31.
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$1.49)