Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZX eyes US investors thirsty for dairy derivatives

NZX eyes US investors thirsty for dairy derivatives

By Suze Metherell

Feb. 3 (BusinessDesk) – NZX, New Zealand’s market operator, has taken another step towards expanding its dairy derivatives market into the US with approval to allow direct access for American customers.

NZX is now a registered Foreign Board of Trade under the US Commodity Exchange Act, allowing US investors’ direct access to trade in New Zealand dairy derivatives. Whole milk powder options and futures, skim milk powder and anhydrous milk fat futures have traded on the NZX since October 2010.

New Zealand is the world’s biggest dairy exporter, with exports of milk powder, butter and cheese climbing about 17 percent to $13.4 billion last year. Trading of NZX dairy futures, though fast growing, is still relatively small, with 36,748 lots changing hands in 2013, up 52 percent, and open interest positions as at Dec. 31 of 9,070, up 316 percent.

“In the scheme of things it’s doing very well,” Kathryn Jaggard, NZX head of derivatives, told BusinessDesk. “It takes two, five, 10 years to become fully mature.”

She said the market operator has “a five-year view” on getting to a level of good liquidity. “We are in a good position, currently around 200 lots a day. We’d certainly like to get 500 lots a day, and 1,000 in the future.”

So far, NZX’s derivatives are faring relatively well. Just 20 skim milk powder futures contracts have traded on the London Futures Exchange since they were launched in October 2010, she said. The Chicago Mercantile Exchange delisted its skim milk powder contracts in 2010.

Last year the NZX extended its derivative market’s trading hours to cater for international customers.

Jaggard said it was a great opportunity for New Zealand to become not only the leader in dairy exports but also the financial hub of dairy trade.

Futures are typically used to help smooth out price volatility, functioning as a binding contract to buy or sell a product at a fixed price at a certain point in time. The NZX contracts are for cash settlement.

Over the past year global demand for dairy has grown, particularly in Asia where growing populations and wealth has seen a thirst for milk and dairy products. In the last GlobalDairyTrade auction on Jan. 21 prices for skim milk powder gained 32 percent from the start of last year, to US$4,698 a tonne. Whole milk powder rose 55 percent to US$4,943 and anhydrous milk fat was up 55 percent to US$5,641 a tonne.

Shares of NZX rose 1.6 percent to $1.28 today.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news