“I think it will be steady as it goes, which is a nice situation to be in.”
All of Miraka’s UHT liquid milk output and about half of its milk powder volume go to China.
It’s milk price for this season is $6.30-$6.60/kg MS and it hasn’t yet made a prediction to more than 100 supplying farmers for next season.
Wyeth, Fonterra chairman John Monaghan and Synlait chief executive Leon Clement were part of the dairy delegation in Trade Minister David Parker’s mission of 17 business leaders to Guangzhou and Beijing at the end of April.
Parker said two-way trade between China and NZ reached $30 billion last year and the latest figures show NZ exports to China in March were $1.5b, which was a record.
Wyeth met senior executives from Shanghai Pengxin, the parent company of Theland in NZ, which packs UHT milk in 250ml consumer packs at Miraka.
He also met Jeffrey Lu, the chief of Mengniu, the largest liquid milk company in China and another UHT and whole milk powder customer for Miraka.
The Chinese business leaders very much appreciated meeting Parker, he said.
Monaghan said the mission supported the Government’s China agenda and Fonterra appreciated being invited to the Belt and Road Forum, though it is not directly relevant to dairy products.
When talking about upgrading the China-NZ Free Trade Agreement, all meetings were constructive.
“Fonterra has been in China for decades now and the more we do on the ground the better for trade talks,” he said.
The delegation visited Fonterra’s Guangzhou food application centre and saw presentations on tea macchiato and other food service products that sell well in China.
“Commentators talk about a slowdown in China’s growth to 6% but we would take that every day of the week.
“Growth is still strong in our terms and there is still plenty of opportunity.
“Fonterra’s opportunities are underpinned by consumer premiumisation and brand loyalties.”
Looking to the new season and the opening milk price to be published later in May he said supply and demand are well matched globally and that will lead to a positive outlook.
Monaghan didn’t meet Fonterra customers or its Chinese investment Beingmate.
Clement, who led the delegation, said participants had agreed to park company-specific interests, represent NZ as a whole, deepen and broaden relationships and be active learners and sharers of what they learned.
“We stuck to the script and there was a great dynamic in the mission – this often happens with a group of like-minded Kiwis offshore.”
Food and beverage companies made up half of the mission but there was also good representation from creative industries and Chinese Kiwis who use e-commerce channels cleverly.
“Eighty per cent of Chinese purchase on multi-channels and we have to tell our NZ stories on those platforms also.”
Economists who presented to the trade mission do not expect an economic slowdown of any significance.
They pointed out moderate, more stable growth over the next 15 to 20 years still presents huge opportunities for traders, bigger than in the high-growth past two decades.
Agricultural trade envoy Mike Petersen said Chinese demand for NZ dairy products continues to grow and there are now many examples of premiumisation by well-known brands like A2 and Anchor.
“Other products from Synlait and Miraka are also visible and easy to find.
“However, I would say that domestic brands are growing and gaining more trust with consumers.”
