16.
07.15
10:54

Fonterra lays off 500 employees - white gold rush for the time being over

Liquid to keep the company, Fonterra is forced to make redundancies to a great extent. The weakness of global demand for milk products, in particular from China and Russia - is suffering the world leader especially. The "white gold"rush is in New Zealand for the time being temporarily.
Milk prices have halved already more than since their peak in 2013. For this, first and foremost, dramatically broken demand from China, the second largest economy in the world, is responsible. Last year large stocks of milk powder had built up, while at the same time, economic growth was slowing.
Fonterra has for years dominated the global milk market and supply the raw material milk powder in recent years China and thus expanded its business in China. The profits of the enterprise are broke but in the last two years in an ever more volatile market. The GDT index on a 12.5 - year-low fell in yesterday's auction. Now 500 of the total 16,000 worldwide employees to dismiss, threaten further layoffs.
Fonterra export has fallen to China since early 2014 to 69%. Meanwhile, only 16% of New Zealand's exports go to China, in the last year, there were still 37%. In addition, Russia had used the import of milk products on its banned list, after it came to a rift over the Crimea and Ukraine crisis with the Western world.
To top it all off the milk production has increased newly steadily Lake country, Europe and the United States in the countries after the price spikes in 2009 and 2013. Particularly in New Zealand, the production reached new records because feed costs fell during the phases of high-priced and good profits were possible. While the two biggest importers now buy less milk products, there is still no slump in production.
I China accesses the industry still have large stocks of imported milk powder of last year, it discourages buyers since last year from new contracts. Optimists assume that another 150,000 tons are stored, it can be also 300,000 tons – nobody knows exactly. The 300,000 tons equal to the half amount of import in 2014. That's why analysts of further price declines, especially in the southern hemisphere the grazing begins in August and the milk deliveries before rising again.
The commodity value Europe for standard milk with 4.0% fat and 3,4% protein is the last week dropped (0.28 cents) source: ife

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