Global dairy prices bounced at auction on Tuesday night.
The Global Dairy Trade index was up 3.2 per cent with all commodities posting gains and was the first lift in two months.
But pundits are divided on whether the rise signals a market revival.
Westpac New Zealand senior economist Nathan Penny said the result boded well for the bank's positive outlook for next season, although he cautioned it was still early days.
"We anticipate that as the Chinese economy gains momentum over the course of the year, following its reopening, we expect improved Chinese demand will lift global dairy prices," he said.
The bank is standing by its $NZ10 a kilogram milk solids forecast for NZ farmgate milk prices for next season.
ASB senior economist Chris Tennent-Brown was less optimistic.
"Although it was pleasing to see prices lift at this event, there's a long way to go before we change our cautious outlook for next season," he said.
Whole milk powder (WMP) prices were more than $US1000 lower than the same time last year.
ASB was sticking with its $NZ7/kg MS forecast for next season's NZ farmgate prices.
Tuesday night's auction went against the futures market, which had been anticipating a fall in WMP prices, although WMP recorded the lowest gain at 1pc.
Skim milk powder led the surge, up 7pc, with cheddar (up 5.7pc), butter (up4.9pc) and anhydrous milk fat (up 4.7pc) also recording strong gains.
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Carlene Dowie
Carlene Dowie is the editor of the Australian Dairyfarmer magazine and has more than 30 years' experience as a rural journalist.
Carlene Dowie is the editor of the Australian Dairyfarmer magazine and has more than 30 years' experience as a rural journalist.
