New Zealand’s Fonterra: China’s demand holding up despite COVID, growth concerns

Marc Riversat, Chief Financial Officer (CFO) at New Zealand's Fonterra Co-operative Group said on Thursday, China’s demand for dairy products remains intact despite concerns over economic slowdown, in the face of the COVID-19 outbreaks.

Key quotes

“If lockdowns to contain COVID-19 in China, Fonterra's biggest export market, hurt demand, the co-op could switch its product mix toward consumer goods from the food-service sector.”

"It's early days. We're live monitoring the situation.”

A bigger challenge was whether Fonterra would be able to pass on significantly higher wholesale dairy prices, which were squeezing its margins”.

"But we've not seen that as a problem yet.”

These comments come a month after New Zealand’s dairy giant lifted its forecast range for what it will pay farmers for milk in the 2021/22 season, passing on the benefit of strong global milk prices.