Fonterra Cooperative Group Ltd., the largest dairy exporter in the world says that the prices of whole milk powder auction have increased to the most in over three months.

The powder for delivery for the month has increased by 1.1 percent from a couple of weeks prior, as revealed by a trade-weighted price index measured by the company following its latest Global Dairy Trade auction. The total cost increased to $3,637 a ton, the maximum for the spot contract since 15th September last year.

Prices started increasing last month with New Zealand announcing medium-level droughts in Northland and within the Waikato province, which happens to be the country's largest milk-manufacturing region.

On 10th December, Fonterra, which makes up for around 40% of the global trade in products such as butter, milk powder and cheese, increased its forecast payment to farmers by 4.5 percent mentioning the international prices.

The products sold by Fonterra include whole and skim milk powder and dried milk fat at its two-weekly Internet-based auctions. It provides a contract for a month with delivery beginning a couple of months following the sale, along with a couple of 3-month contracts with the delivery beginning three and six months later.