NZX’s dairy derivatives begin trade on SGX

Signage at the SGX building on Shenton Way in Singapore; taken October 2018.Signage at the SGX building on Shenton Way in Singapore; taken October 2018.

Under a partnership deal, the New Zealand exchange operator NZX’s suite of dairy derivatives will begin exclusive trade on Singapore Exchange (SGX), the companies said in a press release Monday.

“The joint stewardship of these important contracts unites NZX’s core dairy expertise in industry engagement, market research, and product development know-how with SGX’s international connectivity, under a working strategic partnership,” the statement said.

NZX CEO Mark Peterson said the tie-up would scale up market distribution and liquidity in the global dairy derivatives markets.

“We see this as accelerating market distribution which brings together significantly more buyers and sellers globally, increasing trading activity and benefiting all dairy participants, including the New Zealand dairy farmers and processors who find these contracts particularly important in managing risk,” Peterson said in the statement.

The dairy derivatives were launched by NZX in 2010 to give market participants in the dairy production chain, including farmers and international manufacturers of dairy products, the ability to manage price risks, the statement said.

The product suite has increased to eight futures and options contracts across dairy ingredients, including Whole Milk Powder (WMP), Skim Milk Powder (SMP), Butter (BTR) and Anhydrous Milk Fat (AMF) as well as liquid NZ Milk Price (MKP) contracts.