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Four of five NZ dairy farmers at a loss - BBH

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 8, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Analysts at Brown Brothers Harriman explained that China has indicated it will shutter some of its excess capacity, and although officials have said it before, each time they do, many want to believe them.

    Key Quotes:

    "The general thrust of the National People's Congress meeting is that supporting growth will take priority over reform. Addressing the excess capacity that plagues many industries runs contrary improving near-term growth prospects.

    It is a mistake, however, to think that excess capacity is simply a Chinese problem. Look at what Fonterra, New Zealand's milk coop said yesterday. It cut is price forecast and noted the global slump in milk prices would extend into the third year.

    The increase in European supplies, while (effective) demand in China and Russia eased means that there is greater supply than demand. What this means is that four of five dairy farmers in New Zealand are operating at a loss."
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