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Synlait lifts forecast payout

NZN 8/02/2017 Rebecca Howard

NZX-listed dairy company Synlait Milk has increased the forecast payout for its farmer suppliers to $6.25 per kilogram of milk solids for the current season, up from a prior forecast of $6.

"International dairy commodity prices have improved further since our last announcement in November and although prices have eased slightly in early 2017, we believe $6.25/kgMS is now a realistic estimate for the current season," chairman Graeme Milne said.

Dairy prices eased in January but eked out a gain at this week's GlobalDairyTrade auction, bucking expectations for a decline, as both whole and skim milk powder rose.

The GDT price index rose 1.3 per cent to US$3537, up from US$3517 at the previous auction three weeks ago.

Synlait managing director John Penno says a return to a financially sustainable milk price after two challenging seasons is good news for the company's 200 suppliers in Canterbury.

The forecast payout is slightly higher than the $6/kgMS Fonterra Cooperative Group is forecasting it will pay its 10,500 farmer shareholders.

Synalit's shares last traded at $3.15 and have gained 14 per cent over the past 12 months.

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