Global Dairy Customers Ready For Electronic Trade
27 May 2008
Global Dairy Customers Ready For Electronic Trading
More than 80 percent of Fonterra’s largest commodity whole-milk powder customers have signed up as registered users of globalDairyTrade, the online trading platform scheduled to go live in less than six weeks.
In April Fonterra announced plans for the platform in response to fundamental change in the market place which has seen a lot more price volatility.
Kelvin Wickham, Managing Director GlobalTrade, says: “everything is pointing to the fact that this volatility is going to continue and that prices will move up and down, often unpredictably in response to supply and demand shocks.”
“globalDairyTrade has been designed to help Fonterra and its customers manage price exposure in this market, but will be equally effective in any market conditions. Management of commodity price risk is something customers have been asking Fonterra to provide for them.
“We expect some nervousness from our customers when we introduce something new like this, but initial interest has been, on the whole, extremely positive. Over 100 customers have participated in online tutorials in readiness for the July launch”, Mr Wickham said.
Customers will tender for commodity products each month through globalDairyTrade.
Mr Wickham said he is delighted to announce the appointment of Paul Grave to the new position of Manager, globalDairyTrade
Mr Grave has eight years experience in the dairy industry, and has recently managed Sales and Operations Planning for Fonterra’s milk protein business in the company’s corporate office, following five years in the Company’s USA office
“Paul’s strong commercial law background and his in-depth knowledge of the global trade sector are ideal attributes for the job and it will be his role to ensure the new system is operated in a way that is fair and transparent,” Mr Wickham said.
Fonterra expects around NZ$1 billion of whole-milk powder to be traded on globalDairyTrade in the first year. Other commodity groups will be added over time.
- ENDS -