Fonterra, standing by expectations of a rise in milk prices, underlined the support being provided by weaker production and improved demand, even amid signs that the recovery in values may be taking a breather.

New Zealand-based Fonterra, the world’s top milk exporter, restated a forecast that it will pay its farmers NZ$6.00 per kilogramme of milk solids in 2016-17.

That is up NZ$1.10 per kilogramme of milk solids from the decade low price its producers received last season, although still well below the NZ$8.40 paid in 2014-15.

The forecast milk price “continues to reflect improving global milk prices”, said John Wilson, the Fonterra chairman, flagging “lower supply from New Zealand, Australia and Europe, and steady demand worldwide”.

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