Fonterra auctions move to twice monthly
Fonterra announced today that, as of September, their online globalDairyTrade milk auction events will run twice a month.
“This will add more depth and credibility and even more transparency around pricing trends,” said Kelvin Wickham, Fonterra Managing Director, Global Trade. “With a more frequent pricing signal, market participants will be able to have even more confidence they have up-to-date information on the current balance of supply and demand.”
Fonterra’s globalDairyTrade’s trading manager CRA were also positive about the change.
“GlobalDairyTrade has grown to 280 qualified bidders from 56 countries, an increase from 107 at inception. There are now between 100 and 140 active bidders participating in each event and around 65% of bidders joining the event win product. We are very pleased with the success of this innovative sales channel,” said Brad Miller, head of CRA’s Auctions & Competitive Bidding Practice.
Fonterra also announced a new product for the online auctions from August, Buttermilk Powder, and two new specifications of existing products – High Heat/ Heat Stable Skim Milk Powder and Anhydrous Milk Fat in 1000 kilogram bulk packs.
Wickham said Fonterra saw globalDairyTrade’s continued growth as evidence of an efficient and effective sales channel. “To date we have sold 500,000 metric tonnes worth US$ 1.5 billion on the platform.”
“We now trade four products – Whole Milk Powder, Skim Milk Powder, Anhydrous Milk Fat, and Buttermilk Powder. The current forecast is to sell 530,000 metric tonnes of product over the next 12 months, or approximately 24% of Fonterra’s New Zealand production.”
“With globalDairyTrade, Fonterra has taken a leading role in developing ways to manage the new price volatility in the markets for dairy products,” Wickham said.
“We are very optimistic about the benefits the entire industry will get from a more open, transparent market.”