Singapore-based commodity trader Olam International Ltd. has expressed plans to buy into NZ Farming Systems Uruguay Ltd. offering NZ$109.6 million ($77 million).

Bloomberg TV said that the said plan by Olam will provide a boost to its current lack of dairy supply for its trading operations

Olam said in a statement. NZ Farming, which owns dairy farms in Uruguay, rose 27 percent, the most in almost 17 months, to 52 cents at 12:59 p.m. in Wellington.

Olam, which said last month it has $1 billion to spend on acquisitions and investments, currently sources dairy products from Europe, India and North and South America. Uruguay's dairy industry may benefit from global prices that are forecast to be "generally elevated" over the next five years as demand rises and cost pressures increase, according to a related report by Rabobank Groep in Melbourne today.

"It is a relatively low-cost place to produce milk and if you can get your business's supply chain right it should be a place where you can make money producing for export into the regional and global market," Tim Hunt, a global dairy analyst at Rabobank, said from Melbourne today.