Global Dairy Trade looks to boost liquidity, add new markets

Friday 19th October 2018

The Global Dairy Trade platform is looking to boost liquidity, GDT director Eric Hansen told the NZX Global Dairy Seminar in Singapore.

As of May, the 10-year-old platform had seen US$23 billion traded across multiple products in more than 200 trading events.

While growth had been significant “we really need to do a lot more work to boost liquidity on the platform,” he said.

A number of initiatives are underway, including a "major upgrade" of the platform itself. The new system is due to launch in April or May.

"It is incorporating much more modern digital features to make it more attractive for bidders,” Hansen said.

Fonterra Cooperative Group owns the platform. It's currently reviewing all of its assets to get a better return on its capital.

While the original platform was fit for purpose when it launched a decade ago, “it is quite a rigid table-like structure but doesn’t really take advantage of all that modern technology has to offer," he said.

Among other things, users in future will be able to log a bid from multiple devices, a move aimed at helping bidders who may have issues around connectivity on one device but not another.

Talks also continue around the possibility of developing a new auction platform for European markets.

“We have been going through a very extensive consultation programme and the feedback has been very encouraging,” he said.

Hansen said GDT is now working with various vendors on a possible solution, a process that will continue through the end of the year.

Looking ahead, GDT is “thinking and strategising" on what comes next and the market's needs a few years out.

Above all, “our first, second and third priority” is focused on increasing liquidity, he said.

(BusinessDesk)

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