Low water levels in New Zealand water reservoirs have doubled electricity prices over the past three weeks, putting pressure on Fonterra’s competitiveness, writes the Dairy Industry Newsletter.

Fonterra have raised concerns that the doubling in price of wholesale electricity over the past three weeks is having an impact on NZ’s export competitiveness. This is reported by Dairy Industry Newsletter.

Fonterra COO Anna Palairet said they are confident  they will have sufficient energy to process milk during the season’s peak, but said the prices are putting  significant strain on the company and its shareholders. Palairet said they are managing energy usage and haven’t reduced production, but said there needs to be a longer-term solution. The high prices have been blamed on the low levels of NZ’s hydro lakes. With consumers and businesses being warned that the  impact could continue until early next year.

At the end of last week the NZ Manufacturing Alliance called on the government to intervene after some businesses were forced to suspend operations—wholesale electricity prices were at NZ$800/MW hour last week, up from $150/MWh last year.