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5 Aug 2013
Flash: NZD/USD upside spoiled by milky outlook – UBS
FXstreet.com (New York) - China has imposed an import ban on milk powder and whey protein produced by a major New Zealand exporter – the NZ government made the announcement following weekend reports of potential bacterial contamination, notes Research Analyst Gareth Berry at UBS.
Key quotes
“It is unclear at this stage for how long this ban will remain in force, but in theory the consequences could be quite severe for the New Zealand dollar unless it is lifted within a week or two.”
“Dairy is to New Zealand as iron ore is to Australia. The two commodities top the respective export baskets in either country, and Chinese demand for both commodities has seen a spectacular rise in recent times.”
Total NZ dairy exports came to NZ$11.47bn over the past 12m period.
That's 25.1% of the total export basket, and equivalent to about 5.7% of
NZ GDP.
Key quotes
“It is unclear at this stage for how long this ban will remain in force, but in theory the consequences could be quite severe for the New Zealand dollar unless it is lifted within a week or two.”
“Dairy is to New Zealand as iron ore is to Australia. The two commodities top the respective export baskets in either country, and Chinese demand for both commodities has seen a spectacular rise in recent times.”
Total NZ dairy exports came to NZ$11.47bn over the past 12m period.
That's 25.1% of the total export basket, and equivalent to about 5.7% of
NZ GDP.