Dairy is the largest foreign exchange earner, and New Zealand’s dairy industry employs about 45,000 people tending about 6.4 million cows. Fonterra, the nation’s biggest company, accounts for about a third of the world’s trade in dairy products- it posted revenue of NZ$19.8 billion in the year through July 2012. Now reports of a dirty pipe at a processing plant which may have tainted whey protein used in baby formula with botulism-causing bacteria has caused a contamination scare which is jeopardising the big milk producer’s export ties with China. New Zealand’s dollar fell more than 1 U.S. cent when markets opened on Aug. 5 and traders pared bets on higher interest rates this year on concern that the incident may weaken the $156 billion economy. New Zealand is finding that its greatest strength may also be its Achilles heel.
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