The Euro to New Zealand Dollar (EUR/NZD) exchange rate strengthened on Tuesday after New Zealand police revealed that letters received three months ago contained threats to poison baby formula at the nation’s dairy exporting companies.
The Euro to New Zealand Dollar (EUR/NZD) exchange rate hit a session high of 1.4870
The revelation that dairy producer, Fonterra, received letters laced with high concentrations of the poison 1080 sent the ‘Kiwi’ falling as concerns over the safety of the nations dairy exports were raised. The country’s reputation as an exporter of dairy goods and food is now at risk.
The letters received three months ago were said to contain threats that poison would be put into baby formula unless the New Zealand government stopped using 1080 poison in its pest control programmes by the end of this month. The eco-terrorist also threatened to go public with their threat if their demands were not met. In a bid to lessen the damage, the police went public first.
‘This could be extremely damaging for New Zealand’s exports offshore. Moreover, it is not just dairy and it is not just infant milk formula. Our whole reputation as an exporter of food is at risk as a result of this nutter,’ said Michael Barnett, Infant Formula Exporters Association chairperson.
The revelations could prove to be particularly damaging to an economy that sells around $400 million worth of baby formula to global markets every year. Baby formula exports account for 3% of the country’s total dairy exports.
The revelation is just one in a string of food scares and follows the Fonterra botulism scare, which affected markets 18 months ago.
‘We have tested over 40,000 raw milk and product samples and we have had no 1080 detections. New Zealand’s food safety model is among the best in the world,’ said a statement from the New Zealand Ministry for Primary Industries.
Further losses for the ‘Kiwi’ were restrained following the release of a stronger than forecast inflation report out of China, New Zealand’s largest trading partner. On an annual basis, inflation in China rose 1.4%, a strong rise from the previous figure of 0.8%. The number was also far stronger than forecasts for a figure of 0.8%.
Further gains by the Euro were held in check as industrial production data out of Italy and concerns over Greece weighed upon the single currency.