SML
08/06/2015 08:31
FORECAST
PRICE SENSITIVE
REL: 0831 HRS Synlait Milk Limited (NS)
FORECAST: SML: Synlait forecast milk price for 2015 / 2016 season
Synlait Milk's forecast milk price for the upcoming 2015 / 2016 dairy season
is $5.50 kgMS.
"Despite the small recovery in commodity prices we saw earlier this year, the
market has not delivered the stability we had hoped for," said John Penno,
Synlait's Managing Director.
"We're very aware of how financially tough this current season is for our
suppliers. We are confident commodity prices will recover over time and our
2015 / 2016 forecast milk price assumes we will see the beginning of this
recovery from the current low prices."
"The global oversupply is being met by soft demand across the board. This
creates a lot of uncertainty in an already volatile market, so it will remain
a fragile environment for the immediate future."
Factors contributing to the global oversupply include Russia's ban on dairy
imports, the removal of dairy quotas in Europe and low demand from China.
"The important thing with our 2015 / 2016 forecast is the associated cash
flow our suppliers will receive through advance rates."
Mr Penno said Synlait has deliberately started advance rates higher than
usual to assist farmers with cash flows through the early spring. They will
return to normal levels based on the forecast milk price soon after.
"Our suppliers' needs are front of mind and we're keeping a very close eye on
the market to make the most informed decisions we can."
Synlait has also revised the forecast milk price for the current 2014 / 2015
season down from a range of $4.50 - $4.70 per kgMS to a range of $4.40 -
$4.60 per kgMS. Retrospective payments to suppliers for the current season
remain unchanged until the final payment in October.
Synlait expects to announce the final milk price for the 2014 / 2015 season
in late September, along with an update to the 2015 / 2016 forecast milk
price and advance rates.
End CA:00265344 For:SML Type:FORECAST Time:2015-06-08 08:31:26
