Chinese demand for dairy products remains weak following a slump in buying last year, New Zealand dairy co-operative Fonterra said on Thursday, adding that lower global supply was the big driver rising global dairy prices seen this year.

"We see demand coming back but it's still very weak in China, our biggest market, and we see a lot of demand due to restricted supply than any significant demand," Fonterra Chief Financial Officer Lukas Paravicini told Reuters.

Earlier in the day, the world's largest dairy exporter held its farmgate payout price at NZ$4.70 ($4) per kilogram of milk solids, even as global diary prices have risen since the start of the year due to supply concerns as drought conditions have curbed New Zealand production.

Paravicini added that Fonterra was planning to issue additional "dim sum" bonds "sometime towards the end of the second quarter" to convert short-term funding of a partial share purchase of Chinese dairy processor Beingmate into local, longer-term funding. (Reporting by Naomi Tajitsu, editing by David Evans)