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NZX finally puts date on dairy futures trading

Thursday 26th August 2010 1 Comment

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NZX will launch dairy futures trading on October 8, later than it had originally flagged.

The global whole milk powder futures contract will begin on October 8, giving it the benefit of seeing the start of Fonterra’s globalDairyTrade fortnightly auctions, which start in September.

Last year, chief executive Mark Weldon said he expected to launch the futures market in April or May, and the bourse operator later pushed out the date to June.

Its plans for wider derivatives trading were dented by trans-Tasman rival ASX winning over New Zealand’s power generators for its electricity derivatives market, though Weldon said it would let them focus more on dairy.

“Demand for NZX Global WMP Futures has been very strong, particularly from offshore, and we have timed this launch to ensure all participants are ready to support trading from day one,” Weldon said in a statement.

“We are bringing the world a tool that is made in New Zealand, globally relevant, and built in response to global demand, matching the growing demand for the physical WMP commodity itself.”

Fonterra’s online trading platform will act as the reference price for the stock exchange’s contract, and the dairy exporter also sells skim milk and anhydrous milk fat, two other products previously earmarked for derivatives trading on the NZX market. The stock exchange said it will introduce new futures and options products through the rest of this year and into next year.

The futures contract will be traded on the NZX platform and settled by cash, and will be cleared through the new clearing house operated by New Zealand Clearing.

The shares were unchanged at $1.40 in trading yesterday, and have slumped 41% this year.

Businesswire.co.nz

Comments from our readers

On 26 August 2010 at 9:52 pm Mirranda said:

Great job! Be good to see a commodities market in NZ. We should be a center of this sort of stuff - and give us something else to watch

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