Sharechat Logo

NZX halts trading in dairy derivatives on information errors over GDT forecast offer

Friday 15th May 2015

Text too small?

NZX Regulation, the supervisory arm of the stock market operator, has placed a trading halt on dairy futures and options after technical errors led to discrepancies in information detailing how much product Fonterra Cooperative Group plans to offer in next week's GlobalDairyTrade auction, a benchmark for the derivatives.

Trading was halted at 11.07am today "pending a correction to the announcement regarding the Fonterra Offer Quantities for the GlobalDairyTrade (GDT) auction released yesterday afternoon," NZX Regulation said in a statement. The technical errors are understood to relate to differences in skim milk powder and total volume data published on the NZX website and in the Fonterra statement.

Fonterra released a statement yesterday afternoon saying a change in its supply/demand balance led to an increase in its forecast offer volumes over the coming 12 months by 7,530 metric tonnes, of which 6,210 tonnes will occur in the next three months and the remainder coming in the following four months.

"WMP (whole milk powder) offered by Fonterra on the GDT auction is the main contributor to the change with a 2,480MT increase over the May to June period," Fonterra said. "AMF (anhydrous milk fat) is the second largest contributor with a 2,000MT increase over the June to September period, while Cheese has been increased 1,675MT over June to December."

Fonterra also scaled back its forecast offer of Australian skim milk powder by 1,210 tonnes over the next 12 months, about half of which would occur in the next three months.  

The Reserve Bank this week warned persistently low dairy prices could put stress on indebted farmers operating with negative cash flow this season, that could taint the wider financial system if it stressed lenders' loan books.

Governor Graeme Wheeler told Parliament's finance and expenditure select committee this week that the bank estimates prices will return to an equilibrium price over the medium term of between US$3,200 and US$3,800 per tonne, though market pricing only suggests it will rise to about US$2,700/tonne by the end of the year.

 

 

 

 

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report