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

Life is better with more fizz

Life is better with more fizz

Content provided by CO2Sustain | 12-Mar-2024 | Product Brochure

We make carbonated soft drinks fizzier for longer, so your consumers enjoy the best possible drink experience from their first to very last sip.

Uniting Flavor & Function in Dairy Beverages

Uniting Flavor & Function in Dairy Beverages

Content provided by Virginia Dare Extract Co Inc | 20-Feb-2024 | White Paper

As demand for functional beverages grows, dairy’s innate nutritional benefits and creamy sensory experience make it a compelling choice for consumers.

Replicate full sugar taste.

Replicate full sugar taste.

Content provided by ADM | 24-Oct-2023 | White Paper

Sweetening solutions and flavor technology must work in unison to successfully achieve sugar reduction targets.

Related suppliers

Follow us

Products

View more

Webinars