Ten years ago, Global Dairy Trade held it first online auction on the GDT Events platform with the aim of being the most credible and comprehensive provider of prices across core dairy ingredients.
By the end of June this year, GDT Events had facilitated the trade of more than US$22 billion cumulative value of dairy products to buyers from over 80 countries.
Eric Hansen, Director Global Dairy Trade says the GDT Events auctions re-wrote the rules of engagement for buying and selling dairy commodities.
“In the era before Global Dairy Trade existed, buyers and sellers were struggling to understand what constituted a current market price in the midst of unprecedented volatility. Dairy farmers had limited access to information about what the milk in their vats was worth in international markets.
“By applying advanced auction methods to create a new sales channel for globally-traded commodity dairy products, Global Dairy Trade’s auctions provided assurance to buyers that they were paying a fair market price. Buyers and sellers were able to better manage price risk. And farmers had a regular market-based price signal around which they could plan their farming businesses,” says Mr Hansen.
The transparent, market-based pricing Global Dairy Trade provides now has wide market interest and acceptance and furnishes the references prices on which financial risk management tools are built.
In the early days, however, the Global Dairy Trade development team was under considerable pressure to prove that an online dairy auction platform would work in practice, says Mr Hansen.
“We started with a team of three people, selling just one product each month – whole milk powder.
“We launched at a challenging time. Our first auction on 2 July 2008 delivered prices in the mid-range of expectations. Not long after that, the global economy went into freefall. As the Global Financial Crisis took hold, dairy prices crashed – and they kept falling through to February 2009.
“Then the recovery started. The result achieved in the first Trading Event provided proof of concept – we just had to hold on until the market hit bottom and turned.
“We kept the monthly sales going and GDT Events provided price discovery in a world of huge uncertainty.”
Over time, additional sellers joined GDT Events which is now a trusted and transparent platform for high-volume, high-quality generic dairy ingredients.
By: Global Dairy Trade
Source: Scoop Media