Fonterra

French food giant Danone has confirmed it is seeking full compensation from Fonterra for damage caused to its business following the New Zealand dairy company's botulism scare.

China is questioning New Zealand's '100 per cent pure' brand as headlines worldwide bring attention to Fonterra's milk formula scandal.

New Zealand's reputation as having the best food hygiene standards in the world has gone ''down the toilet'' because of the Fonterra botulism scare, a University of Otago professor says.

Sri Lanka has ordered Fonterra to recall two batches of milk powder which it says is contaminated with the farm chemical DCD, a claim Fonterra chief executive Theo Spierings says the company will fight.

Fonterra's forecast farmgate milk price, which rose a further 50c yesterday, could be revised higher still, Westpac's chief economist Dominick Stephens said yesterday.

Fonterra Co-operative Group has played down the implications of the whey contamination scare as it pushes ahead with a plan to double its milk production in China.

Fonterra plays such an important role in the New Zealand economy, and its presence in the global economic structure, that news the dairy giant is increasing its farmgate milk price created something of a collective sigh of relief.

Fonterra has bumped up its forecast milk price for 2013-14 another 30c to $7.80 per kg of milk solids, citing continuing strong international prices for dairy.

Fonterra's contamination scare continues to have little impact on dairy prices, with this week's GlobalDairyTrade auction up 2.3%.

As Fonterra chief executive Theo Spierings was apologising to consumers and the New Zealand public over the infant formula contamination scandal yesterday, it emerged four batches of potentially tainted product had reached Hong Kong and Australia.

Morningstar Research has put Fonterra Shareholders Fund units under review after the world's largest dairy exporter revealed some of its whey protein concentrate was contaminated.

Although the overnight GlobalDairyTrade auction will have given the first indication of buyers' reaction to the Fonterra botulism scare, a clearer idea of ongoing market impact may not emerge until next month, Rabobank senior dairy analyst Hayley Moynihan says.

The full economic impact of Fonterra's infant formula contamination scare remains unclear, although some economists have suggested it may be short-lived.

A 50c increase in Fonterra's forecast milk price for 2013-14 has been described as an ''overdraft clearer'', allowing farmers to pay back credit lines extended to them during widespread drought.