FCG
13/08/2015 16:02
GENERAL
PRICE SENSITIVE
REL: 1602 HRS Fonterra Co-operative Group Limited
GENERAL: FCG: Changes to Fonterra Offer Quantities on GlobalDairyTrade
13 AUGUST 2015
Changes to Fonterra Offer Quantities on GlobalDairyTrade
Fonterra Co-operative Group Ltd is significantly reducing its
GlobalDairyTrade (GDT) offer quantity forecasts for the next 12 months.
The Co-operative's forecast offer volumes over the next 12 months for New
Zealand products have been decreased by a further 56,045 metric tonnes with a
62,930 metric tonne decrease occurring over the next three months and 6,885
metric tonnes of planned volumes being added back later in the year in
anticipation of changing market conditions.
Fonterra Managing Director Global Ingredients, Kelvin Wickham said the
changes come in response to current conditions on both the demand and supply
sides of the global dairy market.
"In response to current conditions in the global dairy markets, we have
further modified our product mix to shift volumes away from base Whole Milk
Powder (WMP) and into our other products in our portfolio such as value-add
ingredients, consumer and foodservice.
"In terms of our product mix, Fonterra is now selling approximately 70 per
cent of its total product via channels other than GDT and as a result we do
not expect a material impact on inventories," said Mr Wickham.
From a supply perspective, Fonterra's reduction of GDT volumes reflects the
latest production forecast for the coming season where the Co-operative
currently expects its farmers to reduce milk supply by at least two per cent.
This reflects the likely impact of farmers using more traditional practices
to manage their farm businesses within the limits of a low payout forecast.
Fonterra said that, despite recent low prices GDT continues to be a credible
and transparent mechanism for international price discovery.
-ENDS-
While Fonterra's GlobalDairyTrade (GDT) offer quantities and forecasts are
genuine estimates of product availability at the time of publication, they
can change as our view of future events or trends in supply and demand
factors change.
As our supply and demand balance develops over the coming months it may be
necessary to revise our forecasts in the future due to a range of factors,
including those detailed above.
General factors that can influence our GDT forecasts are: seasonal changes or
weather events impacting our milk supply; production, storage or supply chain
constraints; anticipated customer demand from GDT and non-GDT sales channels;
and differences in relative returns of products.
For more information on the global dairy market and trends in New Zealand
milk production see the Fonterra Global Dairy Update or contact your Fonterra
sales representative.
For further information contact:
Abhy Maharaj
Director Equity Markets
Phone: +64 21 879 458
Media queries should be directed to Fonterra Communications:
Dan Wrigley
Communications Manager
Phone: +64 21 820 679
Email: [email protected]
End CA:00268384 For:FCG Type:GENERAL Time:2015-08-13 16:02:47
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