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Aust, NZ dairy export prospects improving

AAP logoAAP 18/08/2016 Jonathan Underhill

China's imports of dairy products jumped 26 per cent in the 12 months to June 30 while growth in European Union milk production has slowed for a third month, signs that the global dairy market may be starting to return to balance.

Fonterra's Global Dairy Update says European milk production growth is at its slowest since early 2015 and rose just one per cent in May compared to May 2015, for a 12-month gain of four per cent.

Milk output fell two per cent in both Australia and New Zealand in the 12 months to June 30 and US production gained one per cent.

Global dairy exports, which lag behind production data as milk is processed and brought to market, remain strong based on data in Fonterra's monthly update.

Australian exports were up eight per cent in the 12 months to May 31, while New Zealand dairy exports rose seven per cent in the June 30 year, EU exports climbed 12 per cent in the year to April 30, and US exports fell eight per cent in the year to May 31.

The US continued to see increased domestic demand and less competitive export prices, Fonterra said.

China led growth among dairy importers, with strong gains for whole milk powder, fluid and fresh dairy and infant formula.

Middle East and Africa imports fell five per cent.

The update comes after the latest GlobalDairyTrade auction this week which saw dairy prices soar more than expected as signs that a world-wide supply glut is easing bolsters optimism about the outlook.

Fonterra on Thursday also confirmed the final NZ10 cents per share payment of its previously announced dividend for the year of NZ40 cents a share.

The company has projected 2017 earnings per share of NZ50-60 cents, reflecting "performance improvements across the business".

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