After years of preparation, NZX’s dairy futures market is now up and running, giving a much needed boost to our capital markets.

From last Friday futures contracts for whole milk powder can be traded on NZX’s derivatives market, with other products to be added to the platform in the coming months.

Stuart Locke, Chairman of Finance at Waikato University, says a chance to invest in dairy should prove popular with investors.

 “I think it’s attractive because it allows people to engage with a key sector in the New Zealand economy. That to me is the real importance of it.”

Professor Locke says short-term investors will be the keenest.

“So here we have an opportunity for them to trade like they can trade shares in Telecom, but they can now trade in a component of the dairy sector and I think that will prove appealing to a lot of in-and-out short term investors. ”

Trades are in US dollars per metric tonne and up to 18 months forward.