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.

Market reaction

NZD/USD is holding the higher ground just below 0.6850, as it remains underpinned by the rebound in New Zealand’s GDP in Q4 and the overall upbeat market mood.

The spot is now trading at 0.6840, up 0.10% so far.