The company has advised that this forecast is subject to change in external factors such as global dairy prices and the Australian dollar.
MG acknowledges that market conditions for key dairy ingredients have remained weak since the last update. "Whilst demand is good, there are significant stocks of Skim Milk Powder (SMP) emanating from Europe and the USA, and production of Full Cream Milk Powder (FCMP) remains strong from New Zealand" states the company in a letter to suppliers.
These higher stock levels are keeping prices weaker.
"We continue to optimise MG’s sales and marketing mix and reduce costs throughout the business to protect the opening price and our suppliers’ interests."
MG welcomed the announcement of a comprehensive Free Trade Agreement (FTA) with China last week but says any benefits from the FTA will only come after it is signed and enacted.
MG is recommending its suppliers exercise caution when setting budgets given the ongoing market volatility.
