Record prices affecting Rewa Dairy supply

The record high price of raw materials to make liquid milk and butter is having an adverse impact on Rewa Dairy Cooperative in meeting the ever increasing demand for these products.

New Zealand media reports international dairy prices continued to rise amid reports that milk was getting too expensive for consumers in New Zealand, the world’s biggest exporter of dairy products.

The Fonterra Co operative Group Limited, which handles more than one third of all international trade in milk products, reported an average 1.2% rise in prices at its monthly online auction, following an increase of 1.5% in December.

The price paid for butter milk powder by international buyers rose 14.5% on top of a 20.6% jump last month.

This has led to major financial and production costs for Rewa Cooperative Dairy Company Limited and concerns continue to be raised by many customers that there is a shortage of Rewa Butter in supermarkets.

CEO Savenaca Seniloli said 90% of raw materials needed for butter production is imported and as a factory, the continuous challenge for them is to meet the domestic demand of liquid milk and butter.

Seniloli earlier confirmed to Fijivillage that for the past three months, they were meeting only 70% of the requirement and hope to stabilize the demand side from February with a shipment of raw materials arriving at the end of this month.

He also said that on the trading front, the huge challenge for the company is exposure to the fluctuating world dairy prices and the lag in price adjustment in the domestic market.
 
This has resulted in the continuous increase in the local price of milk and butter, which went up by 10% late last year while further increases are expected in the months ahead.


Story by: Roneel Lal/Praneeta Deo