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2011/12 Fonterra payout contracts launching at 1.00 pm today

2011/12 Fonterra payout contracts launching at 1.00 pm today

Contracts forecasting Fonterra's 2011/12 payout will be available to the 5000 registered traders on New Zealand's online predictions market, iPredict, and others who sign up for free at, from 1.00 pm today (NZT).

The contracts will ask traders whether Fonterra's final 2011/12 payout, per kilogram of milk solids, to a 100 percent share-backed farmer (before retentions), will be above NZ$6.00, above $NZ6.50, above NZ$7.00, above NZ$7.50 or above NZ$8.00.

On 24 May this year, Fonterra announced the 2011/12 payout was likely to be in the NZ$7.15 to NZ$7.25 range.

Traders can buy as many of each contract as they like. Contracts at higher or lower payouts or in tighter increments will be launched as the dairy season progresses.

In the next few days, iPredict plans to launch stocks to provide New Zealand the first-ever free five-year forecasts of Fonterra's likely milk solids payout.

At 10.00 am today, stocks for the 2010/11 payout were suggesting a final payout of NZ$8.14 for that season, above Fonterra's current forecast that the payout will fall in the NZ$8.00 to NZ$8.10 range.

"Fonterra is New Zealand's most important company, responsible for around a quarter of our exports and around 7% of GDP," iPredict CEO Matt Burgess said today. "iPredict's new stocks mean dairy farmers, the wider industry, economists, banks, the government and everyone with an interest in New Zealand's medium-term economic prospects, will be able to obtain free snapshot information on how the company is likely to perform, in terms of payout, for the next five years."

iPredict produces consensus views on the likelihood of future events, based on the theory of the 'wisdom of crowds'. This holds that where people pool their perspectives and knowledge about a future event, their opinion is likely to be accurate. iPredict's binary contracts of political and economic events have an accuracy rate of 88%.

Predictions markets like iPredict are mainstream throughout the world, with the most prominent being in the United States. iPredict operates in New Zealand with authorisation of the New Zealand Financial Markets Authority. The company is owned by Victoria University of Wellington.


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