Fonterra opens online milk powder trading platform to rivals

Fonterra opens online milk powder trading platform to rival dairy companies

By Jonathan Underhill

March 9 (BusinessDesk) – Fonterra Cooperative Group, the world’s largest export of dairy products, will open its online milk powder trading platform to rivals.

Fonterra has sought feedback from Europe’s Arla Foods and FrieslandCampina, California Dairies and DairyAmerica of the U.S. and Australia’s Murray Goulburn on a draft set of market rules for the globalDairyTrade platform. No companies have yet committed to sell their product on the platform, the cooperative said in a statement.

Having other sellers on globalDairyTrade “will add more volume and will lead to even more reliable price discovery,” said Gary Romano, managing director for Fonterra Trade & Operations. “At the same time, it has the potential to attract more buyers, given the platform will offer products from different geographies, enabling better risk management.”

Since starting in July 2008, dairy products totalling US$3.2 billion have traded on globalDairyTrade. Annual turnover is about 600,000 metric tonnes and more than 300 parties are registered to bid.

The draft rules to allow multiple sellers have been posted on the globalDairyTrade website for feedback. Current products on offer are anhydrous milk fat, buttermilk powder, skim milk powder and whole milk powder.

From May 17, Fonterra will add milk protein concentrate and rennet casein to its line-up at its fortnightly sales.

The price of milk powder rose to the highest level in three years at last week’s auction. The gDT-TWI price rose 5.9%, following a 3.9% jump in the previous auction two weeks earlier. The average winning price across the various dairy products on offer was US$4,826 per metric tonne, up from US$4,540 per metric tonne at the last sale.

Fonterra last month lifted its forecast pay-out to farmers by 60 cents, bringing the total payment to as much as $8 a kilogram of milk solids.

(BusinessDesk)

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