FIfth GLOBALDairyTrade event continues trend

Media Release
5 November 2008

fifTH GLOBALDairyTrade event continues commodities trend

The fifth trading event for Fonterra’s internet-based sales platform, globalDairyTrade, concluded at 2.55 am this morning (NZT).

The trading manager, CRA International, advised Fonterra that after four bidding rounds the average price achieved across all products and contract periods for Whole Milk Powder (WMP) was US$2,586 MT FAS New Zealand Port. This was 11.4 percent lower than for the previous trading event on 1 October 2008. Prices ranged from US$2,405 MT FAS to US$2,700 MT FAS.

Fonterra’s Commercial Director GlobalTrade, Guy Roper, said the worldwide credit crisis is prompting customers and consumers to hold off major purchases of most commodity products, including dairy.

“The price decline is consistent with the limited demand we are seeing for a range of other dairy products, such as Skim Milk Powder and casein, in the near term out to three months,” said Mr Roper. “Buyers appear to have greater needs over the medium term and were prepared to secure supply at prices above the 3-month, or spot price, during the trading event.”

The fall in WMP prices mirrors declines in other commodity markets in recent months. The Chicago Mercantile Exchange futures prices for corn and soybean oil have fallen 50 percent since July, while wheat futures have fallen 40 percent over the same period.

The next trading event will be held on 2 December 2008. See www.globaldairytrade.info for more details.

ENDS

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