Olam International, the Singapore-based food ingredients group, has pulled out of the race to buy Dairy Farmers, the Australian dairy group.

Chief executive Sunny Verghese said today (2 July) that there was "little strategic sense" in making a bid for Dairy Farmers, which is the subject of interest from firms including National Foods and Parmalat.

"It is largely a domestic play and largely in the branded business, which is not currently the focus of Olam," Verghese said, according to The Australian newspaper.

Olam had been named as a potential suitor for Dairy Farmers, which put itself up for sale in April. Two consortiums, one between National Foods and Australian dairy firm Warrnambool Butter and Cheese Factory, and one involving Parmalat and local co-operative Murray Goulburn have formally declared their interest.

Earlier this week, local reports said New Zealand dairy giant Fonterra had decided not to push ahead with a solo bid with Dairy Farmers amid claims it was in talks with National Foods over a joint offer.

National Foods' current bid partner, Warrnambool Butter and Cheese, has insisted it is unaware of any potential partnership with Fonterra.

Dairy Farmers, which owns brands including its namesake milk and Coon cheese, is valued at around A$960m (US$925m).