ROLAND SOSSNA, Editor International Dairy Magazine: Global Dairy Trade 24/7/365. Just a small step for a platform, but a leap for commodity trade?

With the entry of NZX and EEX as shareholders, Global Dairy Trade (GDT) evolves from an export sales tool of more or less only a single nation, namely New Zealand, into a much more worldwide ac-tive auction platform. At least, this is what Fonterra and the two stock exchanges seem to think. But is the mere entry of the two new partners enough to promote international growth?
Remember: Fonterra’s launch of an international auction website caused much furrowed brows and was even met with mistrust in the dairy community back in 2008. Many speculated that web-based trade of dairy commodities could be prone to manipulation of all kind and might only be to the advantage of Fonterra, then the largest dairy co-op worldwide bundling almost 100% of NZ dairy export.

Meanwhile, 14 years later, Global Dairy Trade has established itself as the world’s largest platform for selling and buying dairy commodites. Last year, a total of 626,747 tons of product were auctioned generating a sales figure of US$2.5 billion. Impressive. But the number of bidders is still limited to about 300 with 100 from the north Asian region. And as it seems there is not much growth to be expected in the number of bidders. Everyone who sources commodities on a somewhat larger scale seems to have joined GDT years ago. Even the relaunch of the auction website with new multi-device and multi-employee functions does not help much for further expansion.

To overcome these restrictions, GDT has developed a new concept called GDT Pulse. Simplyfied, this is just another auction in between the bi-weekly trade that has been taking place for the last 14 years. The start will be made with standard WMP made by Fonterra. GDT expects the more frequent auction to provide a better impression of market conditions and, of course, more liquidity for its business. It remains to be seen whether and how the dairy community will accept the concept and whether the two stock exchanges can help at all.

But why is GDT not developing a modern 24/7/365 auctioning concept? Such a platform, of course, highly automated, could respond to selling and buying requests in a second and provide the best possible feeling of market developments. Granted, office hours differ round the globe, but if a buyer could fix specs and details of the request in a well-defined process, one could let the computers handle it all and find the optimum for seller and buyer alike. In principle, this happens anyway during a web-based auction, thinks Roland Sossna.

International Dairy Magazine, March/April 2022

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