September 21, 2009

Dutch Lady Milk Industries Bhd foresees the price of dairy raw materials, such as milk, increasing by between 10-20 percent from the US$2,000 per tonne currently due to an increase in demand.

Managing director Hans Laarakker said raw material costs has started to increase again due to a change in buying behaviour particularly from China who is significantly buying a lot of raw milk powder.

The volatility in prices is worrying, he added.

Laarakker also said that local consumer sentiment had improved in the second half of the year as compared to the first.

In the first half, he said it was difficult in terms of both prices and volume as consumers were being very reluctant to purchase.

As for the overall outlook, he said at the moment, it was very "fluid", not only in terms of revenue but also cost and the exchange rate.