Fonterra may lift its forecast milk price next week on the back of strengthening dairy markets, evident by prices lifting at yesterday's Fonterra globalDairyTrade and measured by the ANZ commodity price index.
Whole milk powder prices rose 13.7% at yesterday's globalDairyTrade internet auction, while the ANZ commodity price index for October rose 8.3%, and is now 44% higher than the low reached in February.
A Fonterra spokesman said the board had planned the price review before this week's internet auction, and it would take into account improving markets and the exchange rate as well as the auction prices.
Fonterra's director of commercial and strategy for trade and operations, Nigel Kuzemko, said this week's auction reflected several months of strengthening prices and positive market sentiment.
The size of increase showed some urgency among buyers to restock but also indicated any recovery was fragile.
The average across the sale of whole milk powder was $NZ4840 a tonne, $584 higher than the last sale. Prices ranged from $4605 to $5232.
Anhydrous milk was offered for the first time and sold for an average price of $6700 a tonne.
Mr Kuzemko said more than $1 billion worth of milk powder had been sold by globalDairyTrade since it was launched in July 2008.
An 8.3% increase in dairy prices helped push October's ANZ commodity price index 4.6% higher, with the export price index now 24% higher than the February low.
Forest products were the main drivers - log prices lifting 15% for the month, sawn timber 6.1% and wood pulp 4.2%.
Wool rose 7.1%, skins 3.5% and aluminium 2.1%, while seafood, venison, lamb and kiwifruit rose by less than 1%.
Beef fell 3.9% and apples 1.7%. But, the rise in the New Zealand dollar outstripped any of the market gains, with the ANZ NZ dollar commodity price index recording a 0.4% drop in September but a 19.3% decline compared with October 2008.
