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

 


NZ dollar recovers after Fonterra cuts payout to farmers

NZ dollar regains ground after Fonterra cuts payout to dairy farmers less than expected

By Tina Morrison

May 28 (BusinessDesk) - The New Zealand dollar gained back ground lost overnight after Fonterra Cooperative Group, the world's largest dairy exporter, reduced its payout to dairy farmers by less than some had expected.

The kiwi was trading at 85.62 US cents at 9am in Wellington, from 85.38 cents immediately before Fonterra's 8:37am announcement and 85.59 cents at 5pm yesterday. The trade-weighted index weakened to 79.72 from 79.87 yesterday.

Fonterra today pulled back its forecast for the coming season to $7 per kilogram of milk solids, better than the $6 payout expected by some. The company also cut its payout for the season winding down this month to $8.40 from a previous forecast of a record $8.65 as increased milk production dents prices. Soaring dairy prices underpinned New Zealand's strong terms of trade last year, and the local currency had fallen ahead of the Fonterra's announcement on concern a sharp decline in the payout could dent economic growth.

"Scaremongering earlier in the week may have depressed expectations into the $6 area and you get this knee jerk response accordingly," said Imre Speizer, senior market strategist at Westpac Banking Corp in Auckland. "It's about what most economists would have forecast. It is not a surprise. We are coming off a record high milk price but it is still a high number and it is still supportive for the economy and moreover Fonterra said they expect supply to rise even further so production is going to increase and production at a decent number is still positive for farm incomes."

Later today, traders will be focused on the ANZ business confidence survey for May, scheduled for release at 1pm. The Reserve Bank will be probably be eyeing the pricing intentions components of the survey for signs of inflation.

The New Zealand dollar was little changed at 92.41 Australian cents at 9am from 92.39 cents at 5pm yesterday ahead of a report on Australian first quarter construction activity today.

The kiwi was little changed at 87.26 yen from 87.28 yen yesterday, at 62.76 euro cents from 62.68 cents and advanced to 50.91 British pence from 50.77 pence yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news