Dairy product prices jump at auction

Prices of dairy products in Fonterra's latest GlobalDairyTrade auction rose by the most in five months, adding to positive sentiment that has pushed the kiwi dollar to near a 30-month high. The GDT-TWI Price Index rose 3.1 percent compared to the last sale two weeks ago, the biggest increase since the September 4 sale and the fifth straight gain. The average winning price rose to US$3,756 (NZ$4,445) a metric tonne. Whole milk powder, the biggest product by volume, led the advance, rising 5.8 percent to US$3,654 (NZ$4,324) a tonne. Rising prices for New Zealand's biggest export commodity follow a raft of figures showing the economy is performing well relative to the US, Europe and Australia, stoking demand for the New Zealand dollar. The kiwi climbed to 84.80 US cents from 84.38 cents at 5pm in Wellington on Tuesday and the trade-weighted index rose above 77 from 76.78. The currency recovered from a sharp sell-off in Asia on Tuesday that had been driven by reports China's quarantine administration destroyed three brands of locally-produced milk powder. Fonterra subsequently said its products weren't involved. The total volume of dairy products sold at the latest auction was 33,467 tonnes, down from 38,232 tonnes a fortnight ago. The price for anhydrous milk fat, butter milk powder, cheddar rennet casein and skim milk powder all rose while milk protein concentrate fell 0.2 percent to US$6,088 (NZ$7,204) a tonne.