Fonterra Cooperative Group, the world's largest dairy exporter, lifted its full-year guidance as global dairy prices strengthened. The New Zealand-based cooperative, which handles about 30% of global dairy trade, reported improved performance in the first half of the fiscal year. The company's decision to raise guidance reflects stronger-than-expected demand from key markets including China and Southeast Asia.

However, Fonterra warned that escalating conflict in the Middle East poses significant risks to its supply chains in the coming months. The dairy giant ships products through major Middle Eastern shipping routes, making it vulnerable to potential disruptions from regional tensions. Fonterra's supply chain network spans over 100 countries, with Middle Eastern ports serving as crucial transit points for Asian and European markets.

The guidance update comes as dairy farmers in New Zealand face mounting pressure from rising input costs and labor shortages. Fonterra's performance often serves as a bellwether for the global dairy industry, with its forecast adjustments influencing market sentiment across the agricultural commodities sector.