A deal that will see New Zealand’s Exchange (NZE) and the European Energy Exchange (EEX) take stakes in Fonterra’s Global Dairy Trade (GDT) platform is expected to ‘stimulate future growth’, the dairy cooperative has said.
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Tie-up positioned trading platform for global growth / Pic: GettyImages-tatiana

Fonterra, NZX and EEX have taken joint ownership of the dairy trading platform having secured clearance from relevant competition authorities, each holding 33.33% of GDT.

Fonterra CFO Marc Rivers said the strategic partnership is an important milestone for Fonterra and global dairy participants. “The move to a broader ownership structure marks the next step in the evolution of GDT – giving it a presence in prominent international dairy producing regions, with greater participation expected at GDT events. It will bring more participants and transactions, stimulating further growth of risk management contracts available on financial trading platforms,”​ he said.

This will provide new opportunities for the development of financial tools to ‘better manage price volatility’ – something all stakeholders from dairy farmers to consumers are exposed to – Rivers stressed. “The GDT team is looking forward to working with EEX and NZX as strategic partners with strong interests in dairy and established reputations as regulated exchanges to enhance GDT’s role as an independent, neutral and transparent price discovery platform,”​ GDT Chief Executive Dr Eric Hansen added.

Creating value through global ambition

Commenting on the deal, EEX Chief Strategy Officer Dr Tobias Paulun said it aligns with EEX’s strategy to take asset classes the organisation already serves ‘to a global dimension’.

“EEX looks forward to supporting GDT’s growth vision with NZX and Fonterra with the aim to create value for the global dairy value chain by further improving price discovery and price risk management instruments,”​ Dr Paulun commented.

NZX Chief Executive Mark Peterson added the strategic partnership will strengthen GDT’s market reach to the benefit of New Zealand dairy farmers and customers. “At a time of geopolitical and macroeconomic instability, GDT’s vision to expand its global reach and provide better transparency in dairy commodity prices, is more important than ever for dairy market stakeholders,”​ Peterson noted.

Next steps for GDT include appointing a new board and planning strategic growth initiatives, such as more frequent auctions and bringing more sellers onto the platform. Fonterra’s transaction proceeds on sale total NZD$35m.

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