Fonterra, the world's biggest dairy exporter, highlighted "some urgency" among buyers to restock after prices in its latest milk powder auction jumped 13.7% to their highest for 15 months.

The New Zealand dairy co-operative, which is responsible for about 40% of world trade in butter, cheese and milk, said that the average price for whole milk powder at its monthly auction rose by $415 to $3,437 a tonne.

The increase, the fourth successive month of gains, took the rally in dairy prices since a July low to 88%.

Prices of anhydrous milk fat, which was traded in the auction for the first time, have done even better, achieving $4,757 a tonne, more than twice the price it was selling for in March. Anhydrous milk fat is a milk solid used by bakers, confectioners and ice cream makers.

'Tight supplies'

Nigel Kuzemko, strategy director at Fonterra's trade and operations unit, said that the price rise, reflected "some urgency [among customers] in refilling their supply chains".

"This is a reflection of the prices that buyers are prepared to pay on the day to secure product in these contract periods," he said.

"And we do have a tight supply situation for most products."

The auction appeared to indicate some expectations that prices would continue to rise, with the furthest-away contract, May-to-July, doing best, achieving $3,684 a tonne, a 21% rise on the month.

The premium over the near-term contract, January, widened to 9.9%.