Int’l - Fonterra warns of softer world dairy prices
Published:June 29, 2006
Source :Fonterra
Fonterra has announced that its committed opening price for 2006-07, although down five per cent on last season's, will be one of the highest in the past decade.
Fonterra's general manager for milk supply in Australia, Steve Nelson, said that the lower opening price for 2006-07 balanced the company's forecast of softening international commodity pricing with a drive to maintain the confidence that has been building in the industry post drought.
"We have experienced two seasons of very favorable international dairy market conditions, with prices for commodities reaching record high levels.
"However, we know from past experience that the dairy market is cyclical and Fonterra believes that these high commodity prices will soften as supply strengthens especially in North America," Mr Nelson said.
"When exactly this will happen, and how far prices will move from the historical peak, is difficult to predict."
