NZX dairy derivatives gain wider reach with addition of US-based ADMIS
By Tina Morrison
March 1 (BusinessDesk) - NZX, the New Zealand financial market operator, has boosted the reach of its dairy derivatives market by linking up with US-based brokerage and clearing firm ADM Investor Services.
Chicago-based ADMIS, which has strong roots in the agricultural commodities market reaching back to the 1930s, has been accredited as a derivatives trading and advising participant and a general clearing participant for the NZX dairy derivatives market. It's the third US-based participant to gain full membership status since NZX was granted authorisation as a foreign board of trade by the Commodity Futures Trading Commission in 2014, Wellington-based NZX said in a statement.
New Zealand is the world’s biggest dairy exporter, selling about $11.57 billion of milk powder, butter and cheese overseas in the year through January. NZX launched the dairy derivatives market in October 2010 with the aim of becoming the global hub for trading tied to the country's biggest export commodity. Dairy derivative volumes rose 109 percent in 2015 as increased liquidity draws in more trading and as demand for risk management products rises in the face of uncertainty about the outlook for dairy prices.
"NZX’s dairy derivatives have evolved into an essential market for a growing number of participants in the global dairy industry looking to manage an increasingly volatile marketplace," said ADMIS president Tom Kadlec.
"We are the leading clearing firm for dairy contracts in the United States and through our sister company, ADM Investor Services International in London, are a lead player in the nascent European market. Joining the NZX ensures ADMIS is at the forefront of providing a complete product offering to commodity customers around the world.”
NZX chief executive Tim Bennett said the addition of ADMIS allows dairy and commodity traders from around the world easier access to the dairy derivatives market, aiding its future growth.