China exports unlikely to grow — Hurrell

We are focused on creating value in China, through innovation and sustainability and the New Zealand provenance story. Miles Hurrell

Fonterra chief executive Miles Hurrell told the China Business Summit in Auckland he doesn’t expect Fonterra’s export share to China to grow. “I wouldn’t see our Chinese supply, our supply in China, increasing, but I don’t see it falling away anytime soon either.”

China currently takes about a third of Fonterra’s exports. “I think we’re in a situation where we see stable milk or even declining milk in the New Zealand context and the global market continuing to grow.”

That said, Fonterra continues to see firm demand from China in the medium to long term.

He noted the co-operative continues to expand the foodservice footprint, moving into second- and thirdtier cities, bringing the total number of cities it operates in to 417.

“We are focused on creating value in China, through innovation and sustainability and the New Zealand provenance story,” he said.

Fonterra, meanwhile, will continue to look to other markets.

“More and more markets understand what we produce and the provenance story that goes with it, the contagion effect of what we’ve seen with Chinese consumers is starting to flow through.

“I think the rest of the world is starting to recognise the importance of what we produce.”

However, he called on the government to do more to support industry with free trade agreements to facilitate diversification.

According to Hurrell, NZ dairy products have access to only 12 per cent of global dairy consumption at tariff rates of less than 10 per cent or without encountering a non-tariff barrier.