UPDATE 1-Fonterra says Jan-Feb dairy exports to China fell 1.4% on year on coronavirus curbs

* World no. 1 dairy exporter had warned of impact in February

* Drought hampers NZ milk production in March (Adds background, data for other regions; changes media slug)

April 30 (Reuters) - New Zealand dairy giant Fonterra’s exports to no. 1 market China slid 1.4% in the first two months of the year from the same period a year ago, it said on Thursday, citing public health measures imposed to counter the coronavirus pandemic.

The world’s largest dairy exporter had warned in February that the coronavirus outbreak “will potentially impact” shipments to China from January.

Fonterra Chairman John Monaghan also said earlier this month that while China was slowly returning to normal, full recovery was still some way off.

China makes up most of Fonterra’s market, as buyers in the mainland prefer internationally made whole milk powder and infant formula, over their local counterparts.

The company did not disclose a total global exports figure for January-February.

Meanwhile Fonterra said milk production in its domestic market dropped 1.9% in March from the same month a year earlier, mainly due to persistent drought conditions across New Zealand.

Fonterra said its Australia milk production jumped 8.1% in February, citing favorable rainfall in many regions, while it also said milk production was improving in Europe despite uncertainties in global demand and supply chain disruptions. (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Himani Sarkar and Kenneth Maxwell)