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China halt amid NZ botulism scare

A botulism scare has prompted China and Russia to stop importing New Zealand milk powder and other dairy products, denting the country's reputation as a supplier of safe, high-quality food.

New Zealand dairy giant Fonterra announced on Saturday that up to 1,000 tons of infant formula, sports drinks and other products sold in seven countries could be tainted after tests found bacteria in whey protein that could cause botulism.

The import bans in Russia and China extend beyond the products specifically targeted for recall. How long those trade halts last could indicate the extent of the damage to New Zealand's reputation as a source of top-quality dairy products.

Dairy and other agricultural exports power the country's economy and China is its single biggest export market. An indication of how serious the threat is to New Zealand trade came over the weekend, when the government assigned 60 officials to work on the botulism scare.

There have been no reported illnesses as a result of the contamination. The Centres for Disease Control describes botulism as a rare but sometimes fatal paralytic illness caused by a nerve toxin.

The scare prompted the New Zealand dollar to drop about two cents against the US dollar, from 79.3 cents on Friday before the announcement to 77.2 cents on Monday morning. It recovered a little by Monday afternoon to trade at 77.4 cents.

Ministry for Primary Industries acting director-general Scott Gallacher said on Monday that China had halted imports of all Fonterra milk powder and whey products, whether those products were exported from New Zealand or Australia.

He said Russia has imposed a wider ban on all New Zealand dairy products even though Russia was not among the countries to receive any of the tainted products. "We do face some market closures," Mr Gallacher admitted.

He said that government officials are seeking clarity from their Russian counterparts, claiming China's response was more understandable, given the situation.

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