Join our daily newsletter At The Bell to receive exclusive market insights
- Fonterra Shareholders Fund (FSF) to partner with New Zealand’s Exchange (NZX) and the European Energy Exchange (EEX) in Global Dairy Trade (GDT)
- The partnership is expected to be completed mid 2022, with each company holding 33.33 per cent
- The companies believe partnership will help manage price risk volatility for everyone in the market
- The price discovery GDT provides the international dairy industry is considered crucial to the companies for dealing with volatility
- Fonterra Shareholders Fund was trading at $3.29 a share early today
Dairy giant Fonterra (FSF) has agreed to a partnership with New Zealand’s Exchange (NZX) and the European Energy Exchange (EEX) to take ownership stakes in Global Dairy Trade (GDT).
The partnership is expected to be completed mid-2022, subject to the approval of boards and competition regulators. Each company will hold an equal 33.33 per cent shareholding in the global dairy auction platform.
Fonterra is a New Zealand dairy co-operative owned by 10,000 farming families. GDT develops and operates trading platforms for dairy products.
NZX operates New Zealand’s equity, debt, funds, derivatives and energy markets, and
the EEX is an energy exchange which builds commodity markets worldwide.
Fonterra Chief Executive Miles Hurrell says the move to a broader ownership structure marks a step in the evolution of GDT by enhancing its standing as an independent, neutral and transparent price discovery platform. It would expand its presence in prominent international dairy producing regions, and create growth opportunities.
“This is good news for our farmer owners, unit holders, and all dairy industry participants and is expected to lead to greater volumes being traded on GDT,” he said.
“It will bring more participants and transactions, stimulating further growth of risk management contracts available on financial trading platforms.
EEX Chief Strategy Officer Dr Tobias Paulun said the partnership is good news for its farmer owners, unit holders and all dairy industry participants.
“We all know that dairy is one of the most volatile traded commodities. The companies believe the partnership will help manage risk for everyone, from the farmer through to the customer,” Dr Paulun said.
NZX CEO Mark Peterson said: “We see the expansion of the physical trading environment as both further strengthening existing financial contracts and enabling the creation of new tools and opportunities for dairy processors and end-users. A more liquid dairy trading environment can allow for the growth of financial tools which can be used by all participants to better manage price volatility.”
Fonterra (FSF) shares were flat at $3.29 in early trade.
