EU auction could steady market
The European Energy Exchange ( EEX) and Global Dairy Trade (GDT) have moved to evaluate the possibility of setting up and operating an auction mechanism for dairy products originating in Europe. If successful, this could help to reduce milk price volatility in the EU, by increasing scope for fixed price contracts.
GDT operates the leading dairy auction globally, with over 520 registered bidders from more than 80 countries. EEX operates futures markets for European skimmed milk powder, butter and whey p o w d e r, u s e o f w h i c h h a s steadily grown since they were set up in May, 2015.
“We believe that our proposal can significantly benefit the dairy value chain by providing another business channel for exports, as well as potentially creating underlying data for new risk management instruments,” said Sascha Siegel of EEX.