Fonterra unit price gains ground

Units in the Fonterra shareholders fund recovered more ground this morning after initially sliding by 8.7 per cent on the back of the infant formula contamination scare yesterday.

The units, which give non-farming investors access to Fonterra's dividend flow, traded this morning at $7.00, up 14c from Monday's close, but still 12c short of their closing level on Friday - before the news broke.

Fonterra said on Monday that it had received confirmation from the Ministry for Primary Industries (MPI) that China had not imposed a blanket ban on Fonterra's products.

The Chinese authorities have temporarily suspended importation of whey powder and dairy base powder produced by Fonterra, or produced in Australia using Fonterra's whey protein powder as an ingredient, it said on Monday.

China had also increased inspection and supervision at the border for New Zealand dairy products, and indicated extra testing may be required, Fonterra said.

"MPI has confirmed that China has not closed the market to New Zealand dairy products - and that China is being quite specific about the range of Fonterra products which it has temporarily suspended," Fonterra said.


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