Ian Palliser


Ian Palliser spent 30 years in the oil industry, culminating in two key roles for the BP Group – VP Procurement & Supply Chain, and VP Strategy & Performance for the refining & marketing business. Returning to NZ and joining Fonterra in 2010, Ian led the Global Optimisation & Supply Chain function, which was created to drive efficiencies in product mix, manufacturing, trading and supply chain and procurement processes, reporting to the CEO.

Ian now manages his own consulting company, PAZO Limited, providing strategic and M&A advice to companies in both the oil industry and the dairy sector.




There are some clear parallels between the oil industry and the diary industry. The former is much more mature at dealing with volatility, with clear spot markets for raw material (crude oil and natural gas) and finished products (gasoline, jet fuel, diesel), huge depth of trade in futures markets, and the use of sophisticated risk management tools a matter of normal business for many participants.

In some respects, diary markets today look like oil markets of the 1980’s/1990’s. As such, could it be that diary markets will follow a similar path to maturity as oil markets? Or could diary look more like many other agricultural commodities, such as sugar, coffee, or corn? Either way, there are lessons to be learned for producers, processors, and major customers, as well as integrated players.

Understanding volatility and its impacts on the various players at each stage in the value chain is a necessary first step. The roles that technological change and information availability play are critical to understanding how markets will progress, as they provide options for companies to engage and invest to alter their exposure to price and margin risk. In this regard, the author predicts dairy will be different to oil, as the technology changes will be different, as will the information flows.

So, lessons to be learnt and understood – for sure. But dairy closely replicating oil? I wouldn’t bet on it.

1PAZO Limited, Auckland, New Zealand

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