Fonterra on Wednesday raised the price it pays farmers for milk for the 2021 season on strong demand for its dairy products in China and Southeast Asia, as well as firmer global dairy prices.
The world's biggest dairy exporter lifted the farmgate milk price range to between NZ$6.90 per kilogram of milk solids (kgMS) and NZ$7.50 per kgMS, from NZ$6.70 per kgMS to NZ$7.30 per kgMS previously.
"Now that we're through the peak of the 2021 milking season, the impact of any changes in global market dynamics is reducing and our view of the season is firming up," Chief Executive Officer Miles Hurrell said.
As of Feb. 2, global dairy prices have gained more than 21% compared with rates in mid-June. [NZDAIR=ECI]
Hurrell, however, said the dairy producer was keeping a close eye on factors that could impact the market, such as domestic weather conditions, likely new COVID-19 waves and milk production in the Northern hemisphere.
Fonterra in December reported higher first-quarter earnings, powered by Chinese demand for its products, especially whole milk powder, a key driver of the milk price.
(Reporting by Sameer Manekar in Bengaluru; Editing by Aditya Soni)
