Fonterra plays down reports of Chinese officials destroying NZ milk powder
Fonterra is playing down reports that China's quarantine administration destroyed three different New Zealand brands of milk powder as being nothing out of the ordinary and part of a regular review.
No Fonterra product was involved.
The kiwi dollar shed half a US cent amid headlines the Chinese agency destroyed the New Zealand powder, just weeks after a global scare about traces of the DCD nitrate inhibiter being present in locally produced milk.
Units in the Fonterra Shareholders Fund were unchanged at $7.13 today.
A Fonterra spokesman told BusinessDesk the review is part of a quarterly report by Chinese authorities on what products have been withdrawn, typically for labelling reasons.
"It's nothing to be concerned about, and it's none of our products," he said.
The currency has since recovered some of its losses, recently trading at 84.28 US cents.
Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney, says the reaction in the kiwi dollar is typical of how closely linked New Zealand's currency is to food quality fears.
"The market really focuses in on food quality, which can be a bit hard to get to the bottom of things."