Middle East Trade Agreement Opens Opportunity for Dairy

The Free Trade Agreement negotiated with the Gulf Co-operation Council (GCC) is good news for Fonterra, New Zealand dairy farming, and the economy, Chairman Sir Henry van der Heyden said.

3 Nov 2009 --- Fonterra exported NZ$686 million of dairy product to these countries in the year to last May. That was up from $498 million in the 2006/07 year.

Sir Henry said there were exciting opportunities in the region, which has a large population of younger people. In Saudi Arabia, for example, 41 per cent of the population is aged 15 years or younger, so dairy products were very important in delivering protein and calcium.

The conclusion of the negotiations represented a significant opportunity for Fonterra in a high-demand region, Sir Henry said. “While the details have yet to be released, dairy trade currently faces tariffs of 5 per cent and we believe the agreement will allow us to become more competitive and to lift sales further.”

The agreement builds on the gains from FTAs with ASEAN, China, and, most recently, Malaysia. Some 40 per cent of Fonterra’s exports now go to countries with which New Zealand has established FTAs.