New Zealand's Synlait cuts dairy price forecast as COVID-19 stokes uncertainty

May 28 (Reuters) - Synlait Milk revised downward its milk price forecast for the current season on Thursday, citing lower dairy prices in tandem with a global slump in commodity prices during the new coronavirus pandemic.

The New Zealand-based dairy company said it now forecasts base milk price for the 2019-2020 season to be NZ$7.05 per kilogram of milk solids (kgMS), versus $7.25 kgMS earlier this year.

Synlait, which is part-owned by a2 Milk Company, set the opening forecast for the 2020-2021 season at an even weaker figure of NZ$6.00 kgMS.

“We don’t yet have a clear view of COVID-19’s economic impact, but we do know it will impact demand, resulting in our decision to release a conservative opening forecast for the 2020/2021 season,” Chief Executive Officer Leon Clement said.

As of last week, global dairy prices have declined nearly 14% compared with the prices on Jan 7.

The world’s biggest dairy exporter Fonterra also announced a cut to farmgate prices last week for the 2020-21 season as demand falters during restrictions to contain the virus. (Reporting by Anushka Trivedi in Bengaluru; editing by Grant McCool)