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 2 ½ - year high.
The GDT-TWI Price Index rose 3.1 per cent 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 a metric tonne. Whole milk powder, the biggest product by volume, led the advance, rising 5.8 per cent to US$3,654 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 yesterday and the trade-weighted index rose above 77 from 76.78.
The currency recovered from a sharp sell-off in Asia yesterday 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.
