New Zealand dairy giant Fonterra continues to feel the impact of the botulism scare on its global consumers when milk prices dropped during the auction organised by its Co-operative Group on Tuesday. The Fonterra GDT Price Index dipped 2.4 per cent as average selling price stood at $4,847 per tonne even if no product that uses the contaminated whey were included in the bids.

However, volume order went up 5.3 per cent, probably to take advantage of the lower prices which was for the first time in two months and before Fonterra admitted the discovery of bacteria contamination on whey produced at its Waikato factory.

The auction resulted in the sale of 60,587 tonnes, up 59.7 per cent from the past auction. The co-operative said it is the highest quantity sold in over three years.

Meanwhile, despite analyst forecast that Fonterra would likely take a $26 million hit under a worst case scenario, according to Goldman Sachs, Fonterra Chairman John Wilson said he would not step down from his post even if the botulism scare is the worst nightmare of New Zealand's largest company.

"It is always up to our board, and our shareholders, ultimately - that is the beauty of a co-operative - but for me it has been absolutely sure that we are doing the right thing for our customers," the New Zealand Herald quoted Mr Wilson.

Fonterra top officials are scheduled to meet government ministers on Friday morning to shed light on the incident.New Zealand dairy giant Fonterra continues to feel the impact of the botulism scare on its global consumers when milk prices dropped during the auction organised by its Co-operative Group on Tuesday. The Fonterra GDT Price Index dipped 2.4 per cent as average selling price stood at $4,847 per tonne even if no product that uses the contaminated whey were included in the bids.

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