Fonterra shaves 50c off forecast milk price
Fonterra has dropped its forecast milk price mid-point by 50c as a surge in global milk production is putting downward pressure on commodity prices.
GlobalDairyTrade (GDT) passed the milestone at the 185th trading event last week. It offers three services: GDT Events, GDT Insight and GDT Marketplace, for dairy buyers, manufacturers and the financial dairy trading sector.
Director Eric Hansen says GDT Events enables high volumes of dairy ingredients to be traded efficiently, its unique scale underpinning the reliability of the reference pricing.
“Over 40 specifications of dairy ingredients are offered to at least 500 registered bidders from 80 countries, offering more trading opportunities than any other platform.”
GDT Events, now in its ninth year, has traded at least 5.8 million tonnes of dairy ingredients, enough to fill 365,000 twenty-foot shipping containers.
GDT Events kept going through the two-year downturn on the global dairy market; in 2016, despite the relatively weak market, at least 95% of the products offered were sold.
“We’re [now] also looking at the viability of creating multi-seller pools for homogenous products, such as generic lactose or other commodity products available from certain regions,” Hansen says. “This would extend the benefits of credible price discovery to a wider range of markets and products.”
In 2016 GDT set up a GDT Events oversight board to promote the independence and transparency of the twice-monthly auction.
Chairman Bill Shields says GDT Events is the leading provider of reference prices for core ingredients, reflecting the levels of global supply and demand traded on the platform.
“The prices established on GDT Events provide businesses along the supply chain with enhanced visibility of the dairy sector and can be used to improve their planning.
“GDT Events shows that better price discovery can be beneficial to market participants whether prices are weak or strong, and can contribute to better price risk management in the dairy industry.”
