Fonterra Cooperative Group 's new steps about milk powder

Tag : Powder Milk
Fonterra Cooperative Group stop trading the milk powder online on Thursday. Fonterra on Thursday sold 5,000 metric tons of whole milk powderfor September delivery in the first transaction on itsglobalDairyTrade online auction site. The selling price was $4,330per metric ton, following 3 hours and 55 minutes of bidding; thatwas 22.7% higher than the starting price of $3,530 a ton. Theauction of whole milk powder for delivery in October throughDecember and January through March is continuing.
Fonterra expects to sell approximately 200,000 metric tons of NewZealand whole milk powder on globalDairyTrade during its first yearof operation. Skim milk powder and other commodity products will beadded to the platform during the first year.
The cooperative announced the new Internet-based sales channel forits internationally traded dairy commodities, the first of its kindin the dairy industry, in April. It expects to open up the onlinetrading platform, once it is established, to supply partners andpotentially to its competitors. This is likely to lead to aninternational dairy futures or derivates market, similar to thosealready in operation for commodities such as oil, sugar and coal.
Fonterra Chief Executive Andrew Ferrier remarked that the newchannel allows Fonterra and its customers to be more responsive toshifting global prices. "GlobalDairyTrade represents a significantshift away from some of the contracting practices that we havetraditionally used."
He went on to say, "The global dairy market is evolving due tochanges in supply and demand, as well as in global stock levels. Weexpect more price volatility for the foreseeable future.GlobalDairyTrade has been designed as a step along the way to helpFonterra and its customers manage price exposure in this sort ofmarket."
Bidding results from globalDairyTrade will be made publiclyavailable. Fonterra expects that over time a global benchmark willemerge, and farmers and customers will be able to see trendsclearly through the season.
More than 80% of Fonterra's largest whole milk powder customershave signed up as registered users of globalDairyTrade, the dairyexporter said in late May.