20 Oct 2015

Milk price slump will last well into 2016 - Danone

8:27 pm on 20 October 2015

Multinational food group Danone is warning low milk prices will last well into 2016, with demand from China and Russia likely to remain depressed.

Finance chief Cecile Cabanis said the dairy market weakness will last longer than the group had anticipated, and low prices will extend into "a good part of next year".

Russia's ban on imports from the European Union, and a backlog of milk powder in Chinese warehouses have reduced global milk demand and suppressed prices.

But Commonwealth Bank analyst Tobin Gorey said a five percent drop in Fonterra's domestic milk collections for the first four months of the 2016 financial year should underpin international prices.