Economists at Bank of New Zealand have lowered their Fonterra milk price forecast to NZ$3.80 for 2015-16 from NZ$4.30 most recently. "
This is part of a wider downward revision to milk price forecasts over recent months such has been the hit from factors like ongoing global milk supply expansion, higher than anticipated WMP inventory in China raising questions of underlying demand, USD strength and EUR weakness, the extension of the Russian trade ban on many Western dairy products, and general weakness in commodity markets and associated rise in risk aversion," they wrote in a note.
Fonterra is due to provide an update on its current NZ$5.25 forecast following its board meeting on 7 August.