Dairy co-op Fonterra has announced some significant changes to its global Dairy sales auction, adding new products and opening up for competitors.
Fonterra has always maintained it intended to allow competitors to trade on the gDT format, in order to improve price recovery and manage risks.
A set of draft rules for participation was released by the world’s largest dairy exporter on Wednesday, drawn up with input from European, Australian and US processors.
Fonterra global Dairy Trade manager Paul Grave says it’s been a long process, but it’s at a point now where the changes make sense.
"It was always our plan to provide an open and transparent market where everybody is able to trade.
"It makes it a much bigger, more liquid market with stronger price discovery."
Fonterra is also expanding the product offering on gDT – from the 17th of May, they will offer protein concentrate and rennet casein, in addition to powder and AMF.
Paul Grave says they won’t ever be able to take the volatility out of the market, but hopefully these changes will give them a bit more insurance against it.
"The market is volatile and that's really caused by external factors we can't control.
"Having a more liquid market will allow us to manage and understand that volatility a lot better, and that's the objective of global Dairy Trade."
Total gDT sales since 2008 recently passed the 3 billion dollar mark.
For more infor on gDT, head to the website, here.
