Coronavirus impact will be short-lived – OCD

Open Country Dairy chief executive Steven Koekemoer has told milk suppliers that how long it takes to contain the virus is key.

“The latest general view is that any negative impact should be short lived,” he says.

“The fundamentals around supply/demand have not changed but the timing of containment of the virus will be key.”

OCD will review the situation this month but says at this stage it sees no reason to adjust the forecast payout. “If the outbreak is controlled in the short term, then we should see higher demand resume and pricing recover.”

OCD has strategically diversified its markets over the last few years to ensure exposure in China is limited. 

“I am confident that in a general tightening global market, we will have no issues selling our product. No doubt pricing in the short term may be impacted, however, we are getting to the tail end of the season and will just need to ride it out,” Koekemoer said.