Strong commodities market aids Fonterra

By staff reporter

- Last updated on GMT

Related tags: New zealand, Commodity market, United states dollar, Fonterra

Fonterra, New Zealand's largest dairy co-operative, predicted world
commodity prices would continue rebounding strongly over the next
few months as supply and demand tightened.

Fonterra, which saw operating revenue rise $519m to $6.5bn in the six months to 30 November, said the recent rise in commodity prices made it confident about meeting targets.

"The supply situation is now constrained with reduced production in Australia and lower volumes out of the US and Europe, and we have seen prices increase in the second half,"​ said chief executive Andrew Ferrier.

Fonterra is the world's largest dairy exporter and its prediction on pricing will build more confidence among dairy firms in Europe.

The European Commission told industry leaders from the UK last week that it also expected record world prices to continue this year in dairy commodity markets.

One of the worst droughts on record in Australia, while unfortunate for domestic farmers, has reduced world stocks and boosted prices further recently.

Fonterra warned that New Zealand's high currency could still wipe out its gains from higher prices, however.

Henry van der Hayden, the group's chairman, said the current situation was unsustainable. "It is ironic that as we go into 2007, New Zealand's Year of Export, we continue to have an uncompetitive exchange rate and high interest rates."

Van der Hayden criticised New Zealand's high consumption economy last October, saying it harmed exports by supporting an over-valued currency. Payouts to farmers would have been "significantly higher"​ without this, he said.

This, coupled with a rising US dollar, meant Fonterra's good results in the first half "would do little more than provide a buffer against full-year currency impacts"​.

Related topics: Ingredients

Related news

Related products

show more

The Elegance of Expeller Pressed

The Elegance of Expeller Pressed

Bunge Oils | 16-May-2019 | Technical / White Paper

Simply put: today’s consumers want food, simply. Shoppers are choosing products with fewer ingredients that are closer to the fresh foods they know. One...

Stable antioxidants for deep frying applications

Stable antioxidants for deep frying applications

Kancor Ingredients Limited | 18-Mar-2019 | Technical / White Paper

Natural antioxidants like rosemary extracts affect the colour and nature of frying oil. OxiKan R, a highly refined extract of rosemary, stabilises oil...

Stable natural colours for meat applications

Stable natural colours for meat applications

Kancor Ingredients Limited | 04-Mar-2019 | Technical / White Paper

Addition of colour makes food more attractive and enhances its overall appeal. However, the addition of colours in meat and meat products poses several...

Related suppliers

Follow us

Products

View more

Webinars