Tainted New Zealand milk powder recalled in Sri Lanka

New Zealand dairy giant Fonterra, already under pressure over a global botulism scare, is facing fresh trouble over milk powder in Sri Lanka, where it is allegedly mixed with a farm chemical.

The company said yesterday it had completed a recall of two batches of milk powder under Sri Lankan government orders because of allegations it contained traces of chemical DCD.

Dicyandiamide, or DCD, is added to pastures to increase agricultural yields.

A New Zealand government website says DCD is not toxic and poses no food safety risk, but adds that international regulators are likely to view DCD residues as a "contaminant".

But Sri Lanka's health ministry said it considered DCD to be a "toxic chemical" that should not be in milk, and that was why it ordered the recall, spokesman Dharma Wanninayake said.

Fonterra, whose brands are the market leaders in Sri Lanka, accounting for nearly two-thirds of imports, has denied its products contain any trace of DCD.