Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Global Demand Prices Stable for Dairy Commodities


Fonterra Says Global Demand and Prices Stable for Dairy Commodities

Fonterra says global demand and prices for dairy commodities are stable and it expects prices will remain at current levels in the short-to-medium term.

Jay Waldvogel, Fonterra Chief Operating Officer, told a media briefing on the outlook for dairy markets that price stability was positive news viewed in the context of a high NZ dollar and the expected currency impact on payout in the next two seasons.

"Markets appear to be acting rationally at the moment. Fonterra's view is that prices are accurately reflecting supply levels and major players in the market are calmly watching signals such as export volumes, global currency movements and stock levels. Overall, product demand is good, and we are expecting prices will stay at around the same levels through 2004.

"If indeed prices remain stable in the medium term, this should provide some protection from the negative impact the high NZ dollar will have on next season's forecasted payout," he said.

Fonterra will advise shareholders of its forecast payout for next season in March.

Mr Waldvogel commented that product supply is constrained and inventories continue to be tight in New Zealand and Australia. Adding to these supply constraints is the fact that milk volumes are dropping in the United States, as are United States' milk product inventories.

He highlighted the importance of Fonterra's global supply partnerships and their role in meeting customer demand.

"Fonterra's major customers need assurances that their ingredient partner can manage supply risks such as the Australian drought situation. That's why Fonterra has made it a priority to secure supply offshore to complement our domestic milk supply. We are actively marketing product from supply partners in Australia, the US, Latin America and Europe," he said.

Mr Waldvogel said a current priority for Fonterra was to continue to take a leadership role to co-ordinate product supply with demand in the international marketplace.

"Fonterra manages around 35% of the world's dairy commodities trade, and we need to take a responsible position in the market. It is in our best interests as a global business to provide clear signals on pricing and product mix to maintain equilibrium. This ultimately benefits our shareholders as they can see consistent returns coming back into the co-operative and our customers whose risks are reduced for price and supply shocks," he said.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Media Mega Merger: StuffMe Hearing Argues Over Moveable Feast

New Zealand's two largest news publishers are appealing against the Commerce Commission's rejection of the proposal to merge their operations. More>>

Elsewhere:


Approval: Northern Corridor Decision Released

The approval gives the green light to construction of the last link of Auckland’s Western Ring Route, providing an alternative route from South Auckland to the North Shore. More>>

ALSO:


Crown Accounts: $4.1 Billion Surplus

The New Zealand Government has achieved its third fiscal surplus in a row with the Crown accounts for the year ended 30 June 2017 showing an OBEGAL surplus of $4.1 billion, $2.2 billion stronger than last year, Finance Minister Steven Joyce says. More>>

ALSO:

Mycoplasma Bovis: One New Property Tests Positive

The newly identified property... was already under a Restricted Place notice under the Biosecurity Act. More>>

Accounting Scandal: Suspension Of Fuji Xerox From All-Of-Government Contract

General Manager of New Zealand Government Procurement John Ivil says, “FXNZ has been formally suspended from the Print Technology and Associated Services (PTAS) contract and terminated from the Office Supplies contract.” More>>