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Fonterra Auction
Published 16 May 12
As the Fonterra auction is now held twice a month with varying intervals, this page has been changed to emphasise the price changes between auctions for different products. For further information on individual product details, please visit the Fonterra site by clicking here.
Please note: GlobalDairyTrade advises that four contract periods will be effective from Trading Event 52 on 20 September 2011. This means that there will be a new Contract Period 1 where the shipment period is the first month after the month of the Trading Event. The existing Contract 1 has been be renamed as Contract 2, and similarly Contracts 2 and 3 are now Contracts 3 and 4.
Dairy America joined trading on 04 October 2011, Trading Event 53.
Arla Foods has now signed up to online trading with low-heat and medium-heat SMP products.
Auction summary for 15 May 2012
- The average price for all products across all contracts now stands at US$2,619/tonne.
- The gDT TWI index shows a 6.4% decrease compared to the previous auction.
- WMP averaged $2,546/tonne across all contracts, a 8.9% decrease on the last auction.
- SMP prices were down on the previous auction by 5.4% to $2,573/tonne.
- AMF (Anhydrous Milk Fat) prices averaged $2,499/tonne in the latest auction, 11.9% lower than the previous auction.
- Casein prices averaged $6,244/tonne, 0.7% more than the last auction.
The next auction is due to take place on Tuesday 5 June 2012.
| Contract period | |||||||
| Bitmap Price changes from previous event | 1 | 2 | 3 | 4 | 5 | 6 | All Contracts |
| Jun-12 | Jul-12 | Aug-12 | Sep-12 | Oct-12 | Nov-12 | ||
| Whole Milk Powder (WMP) | n.a. | -9.60% | -3.00% | -8.50% | -9.90% | -7.10% | -8.90% |
| Skim Milk Powder (SMP) | -4.20% | -4.60% | -2.70% | -9.70% | -11.90% | -10.30% | -5.40% |
| Anhydrous Milk Fat (AMF) | n.a. | -11.40% | -12.60% | -14.10% | -10.00% | -14.40% | -11.90% |
| Butter Milk Powder (BMP) | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. |
| Rennet Casein (RenCas) | n.a. | 0.70% | n.a. | n.a. | n.a. | n.a. | 0.70% |
| All Products | -4.20% | -5.80% | -7.30% | -9.60% | -10.80% | -9.30% | -6.40% |
* Weighted average price.
**gDT TWI weighted average price - see notes below.
Note: there is a three month publication delay on specific quantities (tonnes)
Source: GlobalDairyTrade platform
Notes to the auction
*gDT-TWI™ and All Products (WMP,AFM,SMP) TWI are chain-linked, trade-weighted Fisher indices using total international trade flows which represent the movement in auction prices between auction events. The indices use globalDairyTrade prices where available and USDA Dairy Market News prices elsewhere. USDA Western Europe average price for Butter Oil is used for AMF prior to December 2009, USDA Oceania average price for SMP is used prior to April 2010, and USDA Oceania average price for WMP is used prior to August 2008.
The Fonterra auction takes place bi-weekly on an online trading platform called GlobalDairyTrade. It started on 3 July 2008. Fonterra accounts for more than a third of international dairy trade. Although Fonterra will only sell up to 20% of its commodities through this platform, sales results from GlobalDairyTrade provide a global benchmark for commodity prices.
Four types of contracts are made available. The 'contract period 1' provides for products where the shipment period is the first month after the month of the Trading Event. The 'contract period 2' provides for products to be delivered during the second month after the trading event. The 'contract period 3' means that the delivery of products will take place between the third and fifth month after the trading event in equal monthly deliveries. The 'contract period 4' means that shipment begins six months after the trading event and the duration is three months.
The auction always follows the same pattern. Five days before the start of the event, volumes available and starting prices are made public. During the trading, in each successive bidding round, the price is raised. Given the announced prices, bidders enter the volume they wish to purchase. This continues until the available volume is cleared, each customer staying in as long as they enter volume bids.