Published 4 December 13
As the Fonterra auction is now held twice a month with varying intervals, this page has been changed to emphasise the price changes between auctions for different products. For further information on individual product details, please visit the Fonterra site by clicking here.
Auction summary for 3 December 2013:
The most recent auction showed a 3.9% increase in the overall index. This was driven by a rise in all the major dairy commodity prices, with the exception of Cheddar, which fell by 1.5%. The increase comes despite high volumes on offer due to strong milk production during the NZ flush, indicating that demand helped support prices.
- The average price for all products across all contracts now stands at US$4,973/tonne.
- The gDT TWI index shows a 3.9% increase compared to the previous auction.
- The average butter price was up 4.5% on the last auction, to $3,750.
- WMP averaged $5,035/tonne across all contracts, up 3.4% on the last auction.
- SMP prices were up on the previous auction by 5.6% to $4,791/tonne.
- AMF (Anhydrous Milk Fat) increased by 2.7% on the previous auction, to an average of $5,395/tonne.
- Prices for Casein averaged $11,011/tonne, up 18.9% from the previous auction.
- The price for Cheddar was down 1.5% on the last auction, at $4,584/tonne.
The next auction is due to take place on Tuesday 17th December 2013.
|Changes in Price Indices||Contract 1||Contract 2||Contract 3||Contract 4||Contract 5||Contract 6||All Contracts|
|Anhydrous Milk Fat (AMF)||n.a.||2.2%||2.4%||2.9%||3.4%||9.1%||2.7%|
|Butter Milk Powder (BMP)||n.a.||4.9%||4.0%||n.a.||n.a.||n.a.||4.6%|
|Milk Protein Concentrate (MPC70)||n.a.||4.8%||8.0%||n.a.||n.a.||n.a.||5.9%|
|Rennet Casein (RenCas)||n.a.||17.9%||22.1%||n.a.||n.a.||n.a.||18.9%|
|Skim Milk Powder (SMP)||3.3%||5.3%||5.0%||4.8%||9.5%||20.3%||5.6%|
|Whole Milk Powder (WMP)||-1.0%||2.7%||4.9%||4.9%||0.7%||n.a.||3.4%|
|All Products (Trade-Weighted)||3.6%||3.3%||4.8%||4.1%||3.9%||15.5%||3.9%|
Source: GlobalDairyTrade platform
n.a. indicates no quantity was offered or sold in either the current event and/or in the prior two events.
Notes to the auction
*gDT-TWI™ and All Products (WMP,AFM,SMP) TWI are chain-linked, trade-weighted Fisher indices using total international trade flows which represent the movement in auction prices between auction events. The indices use globalDairyTrade prices where available and USDA Dairy Market News prices elsewhere. USDA Western Europe average price for Butter Oil is used for AMF prior to December 2009, USDA Oceania average price for SMP is used prior to April 2010, and USDA Oceania average price for WMP is used prior to August 2008.
The Fonterra auction takes place bi-weekly on an online trading platform called GlobalDairyTrade. It started on 3 July 2008. Fonterra accounts for more than a third of international dairy trade. Although Fonterra will only sell up to 20% of its commodities through this platform, sales results from GlobalDairyTrade provide a global benchmark for commodity prices.
Six contracts are made available, corresponding to future delivery periods. For example, 'contract period 1' provides for products where the shipment period is the first month after the month of the Trading Even and 'contract period 6' means that shipment begins six months after the trading event.
The use of six contract periods has been in effect since April 2012.
The auction always follows the same pattern. Five days before the start of the event, volumes available and starting prices are made public. During the trading, in each successive bidding round, the price is raised. Given the announced prices, bidders enter the volume they wish to purchase. This continues until the available volume is cleared, each customer staying in as long as they enter volume bids.