Traces of a toxic agricultural substance detected in some Fonterra milk powders has international dairy customers asking for answers.

Testing of 100 samples from products last September revealed low levels of dicyandiamide (DCD) residues in 10 samples of whole milk powder, skim milk powder and buttermilk powder made with milk from the North and South Islands.

The finding has caused concern among international customers of dairy giant Fonterra.

In Taiwan, health officials are investigating whether any of the tainted products reached their shores.


New Zealand is Taiwan's biggest dairy import supplier of goods including fresh milk, cream cheese, powdered milk and butter.

The problem is also being investigated in China where officials have requested New Zealand authorities provide detailed information on the incident after consumers raised concerns.

Last week the New Zealand Government expressed concern about the potential damage to the industry's image.

Fonterra chief executive Theo Spierings today moved to reassure the company's international customers that its dairy products were safe.

"There's no need to panic, no need to raise issues.

"Our testing has found only minute traces of DCD in samples of some of our products. It is important to remember that the minute traces detected were around 100 times lower than acceptable levels under European food safety limits," he said.

Mr Spierings said he was "absolutely not concerned" about potential effects on the company and there had been no impact on sales.

Since the discovery, the suppliers of DCD - Ballance Agri-Nutrients and Ravensdown - voluntarily suspended sales and use of the granules and spray from the market - a decision Mr Spierings said he supported.

"The Ministry for Primary Industries (MPI) confirmed the traces posed no risk to human health, Mr Spierings said.

"The bottom line? Our products are safe."

There was no need to publicly raise the issue of the sample findings when they were discovered in September, because they were within acceptable levels, he said.

No DCD residues have been found in protein products, butter, cheese or anhydrous milk fat, MPI said last week.

Since November, the company has been working with the Government, the fertiliser companies, scientists and other dairy industry representatives gathering information, scientific opinion.

Farmers apply DCD to pastures to prevent nitrates, a fertiliser byproduct that can also cause health problems, from getting into rivers and lakes.