cloud object storage - guide to dairy derivatives · 2017-11-20 · conditions in oceania began to...

Guide to Dairy Derivatives NZX Derivatives Market

GUIDE TO NZX DAIRY DERIVATIVES 2 of 30

CONTENTS

INTRODUCTION 4

NEW ZEALAND DAIRY MARKET 5

Industry Growth 5

Global Growth 6

NZ and International Global Export Market 7

NZX DAIRY FUTURES MARKET 9

Background to dairy derivatives market 9

How do futures contracts settle? 9

Participants 12

TRADING IN NZX DAIRY FUTURES AND OPTIONS 13

Trading Dairy Futures 13

Characteristics of Futures 13

Trading examples 13

How Futures accounts work 15

Trading Options on Dairy Futures 17

GLOBALDAIRYTRADE 20

How does it work? 20

What products are sold? 22

Who buys and sells on GDT? 23

IMPORTANT DAIRY INFORMATION 25

CONTRACT SPECIFICATIONS 26


Disclaimer:

This document is provided is for information purposes and is not intended as, and shall not constitute, investment advice or an offer to acquire or dispose of securities. Although NZX Limited (NZX) has taken care to ensure the accuracy of the information as at the date of publication, NZX does not give any warranty or representation as to the accuracy, reliability or completeness of the information in this document. To the maximum extent permitted by law, NZX and its subsidiaries, employees, officers and contractors shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided or omitted or from anyone acting or refraining to act in reliance on this information. NZX Derivatives Market is a registered market operated by NZX, a registered market operator regulated under the Securities Markets Act 1988.

© Copyright 2014 NZX Limited. All rights reserved.


INTRODUCTION An increase in global demand for dairy products and ease of availability for these products provided by the GlobalDairyTrade (GDT) platform has assisted in seeing phenominal growth in NZX Dairy Futures in recent years. Milk powder is one of the most volatile commodities globally driven by the increase in awareness of milk’s nutritional value and improvement in living standards in developing economies (and demand for proteins). As a result of the spike in demand and multiple unpredictable supply side factors creates a difficult operating environment for all those in the dairy supply chain. Dairy futures and options provide a useful tool for farmers, producers, and manufacturers, among others for management of the price risk inherent to the global dairy industry. It is now more important than ever to understand how to use these risk management tools. This booklet is designed to provide an overview to the global dairy industry with a particular emphasis on the New Zealand Market and International Trade. This booklet then goes on to explore what futures and options contracts are and how they can be used by industry participants as a viable risk management tool.


NEW ZEALAND DAIRY MARKET New Zealand is the world’s largest exporter of dairy commodities, representing approximately one third of international dairy trade each year.1

Dairy products are amongst the most important of all traded food products and trade is dominated by a few particular dairy commodities: Whole Milk Powder (WMP), Skim Milk Powder (SMP), Butter, Anhydrous Milk Fat (AMF) and Cheese. 2

Of these, WMP and SMP are the most basic and important - containing all the vital milk proteins. New Zealand is a major global player in these products, exporting approximately 95% of its milk production in the form of dairy commodities. Nearly half of all WMP exports come from New Zealand.

The New Zealand dairy industry is predominantly pasture-based, with a temperate climate ensuring adequate feed for herds year-round. Dairy farming occupies 1.6 million hectares out of a total of 12 million hectares of pastoral land.

Dairy has been three times more profitable per hectare than other pastoral land use, encouraging conversions from other farming systems, such as sheep and beef, to dairy – especially in the South Island of New Zealand.

Fonterra is by far the largest processor of milk in New Zealand. It processes approximately 96% of all milk solids from dairy farms. Other dairy companies that collect and process milk in New Zealand are: Open Country Dairy, Westland Milk, Synlait, Miraka and Tatua.

As the volume of New Zealand dairy exports has risen, production has also increased to support the growth. Between 1992 and 2013 dairy cattle numbers have grown from 3.5 million to 4.9 million and the value of dairy exports from $2.5 billion to $18 billion (year ended June 2014). Also between 1992 and 2013, China moved from being New Zealand’s 31st destination for dairy products to being number one – annual exports to China increased from $12.8 million to over $6 billion, over the 21 years.3

Industry Growth New Zealand farmers look set to increase the milk supply in 2014 to a forecast 20.6 million metric tons (MT). This represents a 4.5% increase from an amended estimate for 2013 of 19.7 million MT. WMP is the key commodity produced in New Zealand comprising approximately 40% of the total production and in 2014 is likely to reach 1.3 million MT, increasing 2% from estimated production levels in 2013. For 2014 it is likely SMP production will show a marked upswing to reach 420,000 MT, which would represent a 7.7% increase on the 2013 estimate of 390,000 MT. Annual butter production in 2013 was estimated at 9 million MT, with over 500,000 tonnes exported globally. New Zealand remains the dominant exporter of butter accounting for approximately 49 percent of total trade among major exporters.4 Butter production is expected to increase in 2014, with total output pegged to grow by 4 percent relative to 2013.5

1 Fonterra, NZ

2 Dairy NZ, 2010

3 Statistics New Zealand, 2013

4 World Trade Atlas

5 www.fao.org


Global Growth Global demand for dairy is continuing to grow. In particular, population growth, rising incomes and an increase in demand for protein in diets in developing countries such as China and India, are leading to increased demand. However, milk supplies in these developing countries are not keeping pace with this growth. As such, these markets are becoming increasingly important for global dairy companies, who are helping to meet the demand with dairy ingredients, as well as locally produced consumer products. China's share of whole milk powder exports from New Zealand increased significantly during September 2013, with this single market accounting for more than 60%. Demand for imported milk powder is very strong at present in China as they look to secure supplies to make up for a shortfall in domestic milk production.6 In developed countries, where consumption is already high, there is a more consistent outlook with demand expected to remain stable.

Source: Fonterra (Footnote)

Market Situation Propelled by robust growth in import demand from developing countries, worldwide dairy prices increased through 2010 and into the first half of 2011, peaking at levels close to those of the 2007/08-commodity boom. High returns and very good pasture conditions in Oceania and parts of South America generated a supply response triggering a drop in prices. This down turn in prices continued through to the second half of 2012. It was accompanied by an expansion in export volumes. With demand continuing to expand, especially from China, prices bottomed out at levels much higher than during the previous downturn in 2009. The 2012 droughts in the United States and the Russian Federation drove up grain prices, leading to lower dairy output growth in the United States and the European Union, and higher dairy prices. In early 2013, the recovery in prices intensified as reports of much drier weather conditions in Oceania began to impact market expectations of product availability.7

6 AgriHQ, October 2013

Fonterra, NZ (estimate): 1Current volumes are represented by the area of the circles displayed. Growth rates represent forecast compound annual growth rates.

7 OECD – FAQ Agricultural Outlook 2013 - 2022

1% <1%

2% 2%

North America

1% <1%

7%

10% 4%

7%

2%

4% 2-3%

4%

2% 1%

ASEAN

China Europe

ANZ

MENA

Latam

India

Demand Volume

Supply Volume

Demand Growth

Supply Growth

OUTLOOK TO 2020


NZ and International Global Export Market At the date of publication, global dairy prices are relatively low. Prices are determined by supply & demand. Recently supply has been steadily increasing with demand being more erratic. The countries that are the main dairy exporters are: New Zealand, the European Union, the United States, Australia, and Argentina. China, India, Brazil, Ukraine and Russia are also big dairy producers but typically they consume all they produce. The main buyers of dairy products are typically developing countries in Asia, Middle East, and North Africa and South America, including China, Algeria, Saudi Arabia, Nigeria, Iran, Mexico and Venezuela. The United States and the European Union mainly produce for their domestic market needs and export the surplus. E.g. the United States exports around 15% of total milk produced, Australia is approximately 50% and New Zealand is approximately 95%. Most milk in the European Union/ United States goes into liquid milk and cheese production. Skim milk powder (SMP) and butter are often produced with surplus milk as these products have a relatively long shelf life (around 2 years for SMP) and if butter is kept in cool storage it lasts long-term. There are tariffs on entry of certain dairy products into the United States and the European Union so often the internal prices in these markets are higher than prices in the general global market. New Zealand's main dairy product is in Whole Milk Powder (WMP), essentially evaporated or dried milk. New Zealand dominates global supply of this product as well as the market for Anhydrous Milk Fat (AMF), essentially the fat content of the milk. SMP markets are supplied by New Zealand, United States, and the European Union and to a lesser extent Argentina, Australia and at present India.

Source: http://www.dairyco.org.uk/ (Footnote)

http://www.dairyco.org.uk/market-information/supply-production/milk-production/world-milk-production 1FAO data

0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000 90,000,000

100,000,000

United States of America

India China Brazil Russian Federation

Germany France New Zealand Turkey United Kingdom

Tonn

es

Cow Milk Producing Countries

World's Largest Milk Producing Countries - 2012


Projected Highlights The OECD FAO Agricultural Outlook 2013-2022 predicts the following trends:

• World milk production is projected to increase by 168 million MT in the 10 years to 2022, the majority of which (74%) is anticipated to come from developing countries. India alone is expected to account for 29% of the projected change in global milk supplies. The average growth rate for milk production over the projection period is estimated at 1.8%, which is below the 2.3% witnessed in the past decade. The slowdown in growth reflects growing shortages of water and suitable land among developing countries

• Consumption of dairy products in milk equivalent in developing countries is expected to increase on average at around 2% p.a. The expansion in demand reflects robust income growth, expanding populations, changes in diets and greater access to refrigeration facilities. By contrast, consumption in the developed world is projected to increase on average by less than 1% p.a.

• An upswing in international dairy prices is underway. The outlook for the next decade sees real prices averaging significantly higher than during the past decade.

• The OECD is expecting a general expansion of trade in dairy products over the coming decade. Of the main products, butter, cheese and SMP are likely to show average annual increases between 1.6-2.1% p.a. The vast bulk of this trade growth will be supplied by expanded exports from the United States, the European Union, New Zealand, Australia and Argentina. A major expansion in United States dairy exports of butter, cheese, SMP, and whey powder is projected to occur over the next 10 years with increases of 54%, 35%, 63% and 29%, respectively.


NZX DAIRY DERIVATIVES MARKET Background to dairy derivatives market NZX launched a Whole Milk Powder (WMP) Futures contract in October 2010, followed by Skim Milk Powder (SMP) and Anhydrous Milk Fat (AMF) Futures contracts in February 2011. In November 2011 NZX launched WMP Options contracts and in December 2014 added Butter (BTR) Futures to it’s derivative product offering. Since the launch of the NZX Dairy Derivatives market there has been consistent growth in volume and participation and the extension of trading hours in August 2013 (market open now 2.00am NZT) has meant easier access for international participants particularly from the United States and Europe, increasing liquidity across all three futures contracts. The futures contracts are quoted in US dollars, with one contract representing one tonne of product. One WMP options contract represents the right to buy or sell one WMP futures contract and is also quoted in US dollars. All contracts are traded on the NZX and cleared through the NZ Clearing Corporation. The contract specifications for all five NZX Dairy Derivatives products are available from page 28.

How do futures contracts settle? NZX Dairy Futures contracts are cash settled rather than physically delivered. Cash settled futures contracts mean that at the expiration of the contract the value of that contract is paid out rather than there being a transaction of physical product.

WMP Settlement: NZX WMP futures are settled to an average of winning prices for Whole Milk Powder, Regular – NZ, contract 2 in GDT auctions in the same month.

SMP Settlement: NZX SMP futures are settled to an average of winning prices for Skim Milk Powder, Medium Heat - NZ, contract 2 in GDT auctions in the same month.

AMF Settlement: NZX AMF futures settle to an average of winning prices for Anhydrous Milk Fat, Regular 210kg drum - NZ/AU, contract 2 in GDT auctions in the same month.

Butter Settlement: NZX BTR futures settle to an average of winning prices for Butter, Unsalted 25 kg - NZ, contract 2 in GDT auctions in the same month. A January WMP contract, for example, will settle to the average of the two winning prices for Whole Milk Powder, Regular – NZ, contract 2 in the two January GDT auctions.


Source: Agrifax and GlobalDairyTrade (Footnote)

Milk powder is one of the most volatile commodities globally and this volatility is expected to continue as awareness of milk’s nutritional value and improvement in living standards in developing economies (and demand for proteins), including large players like China increases and drives demand. This volatility, as a result of the spike in demand and multiple unpredictable supply side factors, creates a difficult operating environment for all those in the dairy supply chain. When looking at the price of relative commodities, dairy certainly has volatility fluctuations that indicate a need for financial instruments to manage risk. Dairy commodity volatility is at similar levels to other globally traded commodities such as coffee, corn and palm oil. Historically, dairy commodity price risk was relatively low when compared with price risks other commodities were exposed to. Dairy commodity price movements were traditionally minor with a steady upwards long term trend. The Agrifax whole milk powder (WMP) weekly price series, which commenced in 1991, moved by more than $US100 per tonne on just one occasion, prior to June 2006. Since this time Agrifax has recorded 75 occurrences of a weekly WMP price movement of greater than $US100 per tonne.8 Market volatility can be defined as “the degree to which prices fluctuate over time”. It is also widely accepted that “historical volatility is a guide to what future volatility may be”.9

Agrifax and GlobalDairyTrade

8 Agrifax, 2014

9 “Introduction to Futures and Options Contracts” eDairy Inc. www.dairy.nu

0

1000

2000

3000

4000

5000

6000

7000 Ja

n-00

Ja

n-01

Ja

n-02

Ja

n-03

Ja

n-04

Ja

n-05

Ja

n-06

Ja

n-07

Ja

n-08

Ja

n-09

Ja

n-10

Ja

n-11

Ja

n-12

Ja

n-13

Ja

n-14

USD

per

met

ric to

nne

Wholemilk Powder Prices

Agrifax WMP (USD/tonne)

GDT WMP Winning Prices


Volumes and participation in the NZX Dairy Derivatives market have grown consistently since the market began when only 25 lots were traded from launch of WMP in October to the end of 2010. Total volume grew in 2011 to over 11,000 lots (SMP and AMF Futures launched in Feb 2011), 25,000 lots traded in 2012 and volumes in 2013 exceeded 35,000 lots. While the majority of volume traded is in WMP Futures, WMP options continue to experience participation growth – 14,285 WMP options have changed hands since the first trade occurred in June 2014. SMP continues to show good levels of liquidity with 9,175 lots traded to date in 2014. It was in August of 2014 that NZX Dairy Derivatives recorded a record volume month of over 14,000 lots traded across all four instruments and levels of open interest reaching over 25,000 lots. Driving these growing volumes is the increase in participation, which is truly global with trading coming from the United States, Europe, Asia, South America and Oceania. If you require further information on firms that are involved with this market please go to http://nzx.com/investing/find_a_participant

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Volu

me

October 2012 - October 2014

NZX Dairy Derivatives Volume

WMP VOLUME

SMP VOLUME

AMF VOLUME

0 5,000

10,000 15,000 20,000 25,000 30,000

Oct

-12

Nov

-12

Dec

-12

Jan-

13

Feb-

13

Mar

-13

Apr

-13

May

-13

Jun-

13

Jul-1

3 A

ug-1

3 S

ep-1

3 O

ct-1

3 N

ov-1

3 D

ec-1

3 Ja

n-14

Fe

b-14

M

ar-1

4 A

pr-1

4 M

ay-1

4 Ju

n-14

Ju

l-14

Aug

-14

Sep

-14

Oct

-14

NZX Dairy Derivatives Month End Open Interest


Participants

Dairy producers Dairy farmers are directly exposed to global dairy commodity prices through the amount they are paid by processors for liquid milk. In New Zealand this is the milk price in NZD per kg of milk solids. New Zealand farmers in particular are highly exposed to global dairy commodity prices given 95% of their milk is exported in the form of dairy commodities, for example there is a strong correlation between WMP prices and the New Zealand milk price. Managing and measuring milk price risk is a significant consideration for all dairy farmers, NZX Dairy Derivatives provide farmers with a daily transparent indication of sentiment around dairy commodity prices, and the opportunity to lock in a portion of production.

Dairy processors While dairy processors who are cooperatives have traditionally passed on commodity price risk to farmers, as explained above there is a growing demand from farmers for more certainty in the price they receive for their milk. The existence of dairy futures offers processors the ability to fix in sales price and in turn, offer fixed price for the liquid milk they purchase. Additionally dairy futures offer processors the opportunity to hedge inventory or future sales and offer purchasers the ability to create forward price certainty.

Purchasers of dairy ingredients Purchasers face significant risk where price volatility exists, price uncertainty makes forward planning difficult, can squeeze margins and increase costs of production. Dairy futures allow purchasers and manufacturers to effectively mitigate this risk in the same way as buyers have used commodity futures such as sugar, coffee and cocoa for many years. Being able to lock in a purchase price ahead of time is vital to effective forward planning and risk management.

Dairy trading firms Dairy trading firms are active buyers and sellers of product, sourcing ingredients and selling on to customers around the world, meaning they experience both buy and sell side risk. Being able to mitigate this risk is increasingly important, while dairy futures also provide these firms with the opportunity to offer risk management to customers

Banks Around the world, banks work with farmers to provide lending facilities and hedging tools for currency and interest rates. Banks, like their customers, like to have stable cash flows, and to reduce payment risk as far as possible. Given the volatility of dairy commodity prices, and hence in farmers cash flows, NZX Dairy Derivatives provides banks with another product they can offer to farmers. Improving cash flow certainty is in both the banks’ and farmers’ best interests. At a macro level, banks around the world have a significant amount of capital allocated to the dairy sector. NZX Dairy Futures provide products for banks to manage their portfolio exposure to the dairy sector as a whole.

Funds Funds throughout the world are starting to recognise the importance of dairy in the global political economy and as a traded product. NZX Dairy Futures provide funds with the opportunity to gain exposure to long-term trends in the dairy sector and demands for proteins, and therefore to expand their portfolios to include the global dairy industry.


TRADING IN NZX DAIRY FUTURES AND OPTIONS Trading Dairy Futures NZX Dairy Futures are designed to manage risk and smooth out volatility and are intended to create price certainty, transparency and a forward view of market sentiment. Dairy futures traders can be categorized into two groups: hedgers, who are seeking to mitigate risk by creating price certainty (processors, producers etc.), and speculators, who seek to make a profit by predicting market moves.

What is hedging? To hedge is to create “a barrier or protection against something, esp. against the risk of loss on an investment”10. Hedging is based on the principle that the physical market price and the futures market price tend to move in the same direction, at the same time. This correlation is not perfect however it is usually close enough that it is possible to reduce the risk of loss in the physical market by taking up an opposite position in the futures market. Taking up an opposite position allows losses in one market to be offset by gains in the other market, therefore allowing the hedger to create price certainty for transactions that may not take place for several months.

What is speculating? A speculator uses futures in a different way to a hedger. To speculate is to “buy securities or property in the hope of selling them at a profit”.10 With futures, it is just as easy to initiate a trade by selling a futures contract first as it is to buy first. A speculator who thinks prices will rise can buy (go long) dairy futures. Speculators who think prices will fall can sell (short) dairy futures. To close out or offset the initial transaction, they will take the opposite positions (selling contracts they bought, or buying contracts they have sold).

Characteristics of Futures A futures contract is a commitment to make or take delivery of a specific quantity and quality of a given asset at a specific date in the future at a price agreed today. All terms of the contract are standardized, other than price. Procedures and market regulation are in place to restrict manipulation and encourage fair dealing.

Benefits of trading Dairy Futures The benefits of trading futures include virtual elimination of counterparty credit risk, ability to set prices in advance and an ability to adjust volume in the open market. NZX Dairy Futures are cash settled meaning greater flexibility and facilitating increased volume from speculators and hedgers.

Trading examples To give you a better idea of how hedgers and speculators would use NZX Dairy Futures lets look at the following trading examples:

Long Hedge A GDT buyer in July is looking to purchase 100 tonne of Skim Milk Powder (SMP) in October. The buyer is concerned about prices rising. The GDT buyer purchases 100 SMP October futures contracts at US$4,600. We know that there are two GDT events in October and the average price of the two will determine the settlement price of the SMP October futures contract. At the first event of October the trader can buy 50 tonne of SMP Medium Heat Contract 2 for US$5,000/ tonne. At the second event the trader buys the remaining 50 tonne of SMP Medium Heat Contract 2 for US$5,200/t. The two event prices result in the SMP October futures contract settling/ closing out at US$5,100.

10 Collins Dictionary, Sixth edition 2004


Month Physical market transaction Futures market transaction Value of transaction

July - Buy 100 SMP October futures contracts at US$4,600

US$4,600/t11

October GDT auction 1 Buy 50 tonne of SMP Medium Heat Contract 2 for US$5,000/t

- -

October GDT auction 2 Buy remaining 50 tonne of SMP Medium Heat Contract 2 for GDT event for US$5,200/t

Close out SMP futures position by letting contracts expire at US$5,100

US$5,100/t

Gross Physical Price US$5,100/t

P/L on Futures US$500/t

Net Physical Price US$4,600/t

In this example above the GDT buyer paid US$5,100/t for physical SMP in October. However, through the use of NZX Dairy Futures trading made a profit of US$500/t (US$5,100 – US$4,600) on the futures market. The profit made in the futures market offsets the rising GDT prices and locks in an effective purchase price of US$4,600/t or US$460,000 for 100 tonne of SMP.

Short Hedge It is April and a dairy producer has Whole Milk Powder (WMP) to be sold in August. Because of concerns that the price could fall the producer decides to hedge by selling August WMP futures contract at US$4,800. As the producer currently holds WMP inventory (i.e. is long physical), the opposite position to take up in the futures market is to sell futures. When the producer goes to sell the physical WMP they will buy the WMP futures contract back. If the price of WMP decreases in the physical market and futures market (as prices in both markets tend to move in the same direction), the following will result:

April WMP physical price

August WMP physical price

Profit/ loss on physical

April futures price

August futures price

Profit/ loss on futures

Net selling price

US$4,800/t US$4,500/t -300 US$4,800 US$4,500 +300 US$4,800/t

US$4,800/t US$4,200/t -600 US$4,800 US$4,200 +600 US$4,800/t

Conversely, if the price of WMP rises by August, the following will result:

April WMP physical price

WMP Physical price

Profit/ loss on physical

April futures price

August futures price

Profit/ loss on futures

Net selling price

US$4,800/t US$5,000/t +200 US$4,800 US$5,000 -200 US$4,800/t

US$4,800/t US$5,200/t +400 US$4,800 US$5,200 -400 US$4,800/t

In both of the above scenarios above, the profit/ loss in one market is offset by a loss/ profit in the other market. Therefore, in either of the above, the producer has created price certainty ahead of time.

Speculative Trading It is mid July and a speculative trader has a bearish opinion on dairy commodity prices based on several recent economic reports. To profit from this view the trader sells 50 WMP January futures contracts for US$5,125. Three months later GDT WMP prices have fallen to US$4,950/t. The trader now decides to close out this position by buying back 50 WMP January futures contracts at US$4,950. This results in the following:

11 Only a percentage of the value of the trade is deposited as margin


Month Futures transaction Value of transaction

July Sell 50 SMP January futures contracts at US$5,125

US$5,125/t

October Buy back 50 SMP January futures contracts at US$4,950

US$4,950/t

Net profit/ loss US$175/t

As you can see in the example above, the speculator has sold futures contracts first and made a total profit of US$8,750 (50 * US$175) from a bearish view that they had. Conversely if the GDT price of WMP rose the trader would make a loss as follows:

Month Futures transaction Monetary value of transaction

July Sell 50 SMP January futures contracts at US$5,125

US$5,125

October Buy back 50 SMP January futures contracts at US$5,300

US$5,300

Net profit/ loss - US$175

How Futures accounts work Unlike trading in equity or debt securities, when trading a futures contract you do not pay or receive the full value of the trade when the transaction takes place. Instead, a futures contract is backed by a margin account. Upon entering into a futures position the holder is required to pay an ‘Initial Margin’ into this account. Throughout the life of a futures contract the holder may also be required to deposit additional payments, known as ‘Variation Margin’ into this account if there are adverse price movements in the market. The Clearing House plays a vital role in the operations of Futures trading which is examined below:

The Clearing House The Clearing House operates under a central counter-party model. It offers clearing and risk management services for NZX’s Markets, covering cash equity and debt products as well as derivatives. The Clearing House is an essential piece of capital market infrastructure. The Central Securities Depository provides securities safe keeping services, stock lending and borrowing, and settlement of transactions between participants. In addition, trades executed on NZX Markets are settled in settlement accounts held in the Depository.

Clearing Participants A General Clearing Participant is a Clearing Participant that has been accredited and approved by NZC for the purpose of clearing and settling trades through the Clearing House. A General Clearing Participant has the ability to:

• Clear and settle trades on behalf of Trading Participants with whom it has a Clearing and Settlement Agreement; and

• Clear and settle trades on its own behalf.

Advising Participants An Advising Firm is a Participant that has been accredited and approved by NZX for the purpose of providing advice to clients. Advising Firms are not able to directly enter and/or settle trades, and must enter into an agreement with a Trading and Advising Firm for the execution of trades. An Advising Firm has the ability to:

• Provide advice to clients; and


• If permitted by NZX, hold client funds.

Trading & Advising Participants A Trading and Advising Firm is a Participant that has been accredited and approved by NZX for the purpose of providing advice to clients and trading in the derivatives market provided by NZX (the “NZX Derivatives Market”). Trading and Advising Firms have the ability to:

• Advise clients; • Trade on behalf of clients or as principal in the NZX Derivatives Market; • Hold client assets; • Enter into Trading Agreements with Advising Participants; and

If accredited to do so, offer Direct Market Access (DMA) facilities to its clients

Margin

Initial Margin (IM) NZX Dairy Futures operate on a SPAN© ("Standard Portfolio Analysis of Risk") margin system to determine how much a holder of an NZX Dairy Futures contract is required to pay as an Initial Margin. SPAN© is a margining system developed by the Chicago Mercantile Exchange (CME) and is the industry standard for derivatives margining. By using a defined set of parameters, SPAN© assesses the maximum potential loss for a given portfolio in a normal market, and matches the initial margin required to cover this risk. Initial Margin for NZX Dairy Futures is generally between 5-15% of the value of the traded contract. This margin acts as a good faith bond that will be used if the holder of the account fails to meet any obligations. If all obligations are met then the Initial Margin is returned in full once the dairy futures position is closed. To find out more about current Initial Margin rates and SPAN Parameters visit: http://www.nzclearingcorp.com/risk-management

Variation Margin (VM) In addition to the Initial Margin required to open a futures position, the holder of an NZX Dairy Futures contract may be required to deposit additional payments into the margin account in the event of adverse price movements in the market. This is referred to as Variation Margin (VM). A margin call is required if the price moves so much so that the balance of the holders margin account falls below a set minimum maintenance margin. Example: a futures contract with an Initial Margin requirement of $2,000 and maintenance of $1,800. If the price falls by $220 from Day 1 to Day 2, the account balance has fallen below $1,800 ($2,000 - $220 = $1,780) and would initiate a margin call. The holder in this case would be obligated to deposit funds into the margin account so as to re-establish the account balance to $2000. Failure to meet a margin call initiates a Risk Management event, and will incur fees and potential disciplinary action.

Margin Trading Example A trader buys a WMP futures contract at $5,000. Let’s assume an Initial Margin requirement of 7% with maintenance equal to $280

Day Transaction IM Settlement Price

Profit/ loss on position

VM End balance

D1 Long WMP at 5,000 350 5,000 - 350

D2 ê 4,750 -250 250 350

D3 é 4,950 +200 550

D4 Short WMP at 5,050 é 5,050 +100 650

Net profit/ loss on futures contract +50


On Day 2 the price had moved by $250, which resulted in the balance in the margin account falling below $280 ($350 - $250 = $100), initiating a margin call. The trader is required to deposit a further $250 into the margin account, bringing the balance back up to $350. On Day 4 the trader closes out this futures position by selling WMP futures contracts. The value of the margin account is returned in full resulting in a net profit of $50.

Basis The link between physical market price and futures prices is known as the ‘Basis’. As previously discussed the price of dairy products and price of a futures contract are not identical. It is important for hedgers to be aware that the slight difference in futures and physical prices could slightly reduce the expected profit on the overall transaction. The key types of basis for Dairy futures are:

Grade basis NZX Dairy Futures are based on a specific grading of dairy product (example: WMP Futures are based on Fonterra product, Regular – NZ, Contract 2). If a hedger is using WMP futures, but buying a different grading of WMP product at GDT auction, there may be a slight difference in price, known as Grade basis.

Location basis Prices tend to vary for markets in different areas. For example a dairy producer using dairy futures to hedge, but selling to a different market (not GDT), will need to take into account possible difference between the price they receive at the different markets.

Trading Options on Dairy Futures NZX lists Options on WMP Futures contracts. An option is the right, but not the obligation for the option purchaser, to buy or sell a futures contract at a specified price within a specified expiration date. Trading options on futures is similar to trading futures themselves, but with a greater deal of flexibility. Options on dairy futures are listed on the nearest six WMP Futures contract months. There are two types of options, calls and puts.

Call A purchaser of a call option holds the right, but not the obligation, to buy a WMP Futures contract. While a seller of that call option holds the contractual obligation to sell the WMP Futures contract should the purchaser exercise their right. A buyer of a call option pays for the right contained in this option to the seller, the option price is known as ‘premium’.

Put A purchaser of a put option has the right, but not the obligation, to sell a WMP Futures contract, while the seller of that WMP put option has the contractual obligation to buy that WMP Futures contract should the purchaser exercise their rights. A buyer of a put option pays for the right contained in this option to the seller, the option price is known as ‘premium’.

Exercise position table Call option Put Option

Option buyer Pays premium, right to buy Pays premium, right to sell

Option seller Receives premium, obligation to sell Receives premium, obligation to buy

Characteristics of Options There are five key characteristics of an options contract. They are:

• Underlying asset: an options contract must be based on an underlying asset or instrument. For NZX Dairy Options this is a Whole Milk Powder (WMP) Futures contract.

• Expiration date: all options contracts will expire on a specified date. For NZX Dairy Options that is the business day before the underlying futures contract expires.

• Type: a call option or a put option


• Strike or Exercise price: this is the agreed price at which the underlying instrument (WMP Futures contract) will change hands if the option is exercised, e.g. a 4500 WMP call option identifies US$4,500 as the strike price.

• Premium: the cost or price of the option. While the above four characteristics are set by an exchange (NZX), the premium is set by market forces (supply and demand). It is the amount paid by the buyer of an option to the seller of an option.

Benefits of Trading Options The variety of uses of options contracts provides the opportunity to tailor one’s risk-reward profile to suit a view on the likely move in the price of an asset. Options provide an investor with much more choice than to simply buy or sell the asset. Options contracts can, for example, be used as a form of insurance for hedgers. Just as a person would purchase insurance on their car, a firm with an interest in the dairy industry would look for insurance against adverse price movements. If the price of dairy falls then a put option buyer would be protected against this fall, however can still benefit if there is a price rise. Conversely if you were looking for protection against rising prices, call options are an ideal form of protection. Very much like insurance, to purchase an options contract you are required to pay a ‘premium’ to the seller of the options contract.

Trading Examples

Buy Put It is April and the WMP July futures are trading at US$4,500. The July US$4,500 Put option will have value if the futures price falls below US$4,500; If the price is above US$4,500 on July, then the option will expire worthless. A dairy producer/ cooperative buyer decides to use put options to lock in a selling price for their product and protect against the risk of WMP prices falling. The producer/ cooperative buyer purchases a July WMP put option with a strike price of US$4,500 for a US$276 premium. If prices fall you will receive a minimum of US$4,224. That is, the option strike price (US$4,500) less the cost of the premium (US$276). Assume the WMP July futures price falls to US$4,000. The put option is ‘in-the-money’ and can either be exercised or on sold for at least its intrinsic value of US$500. Deducting the US$276 premium paid gives you a net gain of US$224. The physical market price of US$4,000 plus the US$224 gain gives you an effective selling price of US$4,224/t for Whole Milk Powder in July. Let’s assume however that the price rises to US$5,000. The put option will expire worthless. The physical market price of US$5,000 less the cost of the put option (US$276) gives you an effective selling price of US$4,724/t for Whole Milk Powder in July. Through the use of put options the producer/ cooperative buyer has locked in a minimum effective selling price of US$4,224, while still open to the opportunity of gains should the price rise.

Buy Call Protect against higher prices and opportunity if prices fall It is September and as a GDT buyer you need to establish a WMP purchase price for mid December, you are happy with the current GDT price of US$4,500/t and December WMP futures are also US$4,500. At this level you decide to use options to protect your dairy purchase price and related profit margins against a significant rise in the price of WMP. By buying an at-the-money WMP call option you will be protected from a price increase yet retain the downside opportunity should prices fall between now and December.


You purchase a US$4,500 WMP December call option for a US$360 premium. If prices rise you will pay a maximum of US$4,860 for Whole Milk Powder. That is, the options strike price (US$4,500) plus the premium paid for the option (US$360). Assume the WMP December futures price has risen to US$5,000; the call option with a strike price can be exercised or on sold for at least its intrinsic value of US$500. Deducting the US$360 premium that was paid for the option gives a net gain of US$140/t. The physical market price of US$5,000 less the US$140 gain gives you an effective buying price of US$4,860/t for Whole Milk Powder in December. Let’s assume however that the price of December WMP futures fall to US$4,000 decreasing below your strike price of US$4,500 and you let you option expire worthless. The physical market price of US$4,000 plus the cost of the option (US$360) gives you an effective buying price of US$4,360/t for Whole Milk Powder in December and has protected you from price rises. Regardless of how high the price may rise, the GDT buyer has locked in a maximum purchase price of US$4,860, while as prices decline, the GDT buyer continues to improve on the effective purchase price.


GLOBALDAIRYTRADE Established in 2008, GlobalDairyTrade (GDT) is an online platform for manufacturers' to trade dairy products on a global stage, and has become a leading price reference indicator for the industry. The auctions, which are referred to as trading events, are run twice each month. Currently, GDT hosts hundreds of bidders from 90 countries.12

How does it work? GlobalDairyTrade trading events are performed as ascending price clock auctions run over several bidding rounds. In each auction a specific maximum quantity of each product is accessible for sale at a pre-announced starting price. Bidders bid the quantity of each product that they wish to purchase at the announced price. If the sum of all bids exceeds the quantity on offer, then the trading manager increases the announced price at the start of the next round, and bidders must bid their desired quantity at the new, higher price. Generally, as the price of a product increases, the quantity of bids received for that product decreases. The trading event runs over several rounds with the prices increasing round by round until the quantity of bids received for each product on offer matches the quantity on offer for the product (as shown in the diagram below). Each trading event lasts approximately 2 hours.

12 GlobalDairyTrade Holdings Ltd, NZ

0 200 400 600 800

1,000 1,200 1,400 1,600 1,800

2 Ju

l 200

8 3

Feb

2009

1

Sep

200

9 6

Apr

201

0 5

Oct

201

0 18

Jan

201

1 3

May

201

1 16

Aug

201

1 6

Dec

201

1 20

Mar

201

2 3

Jul 2

012

16 O

ct 2

012

5 Fe

b 20

13

15 M

ay 2

013

3 S

ep 2

013

17 D

ec 2

013

1 A

pr 2

014

15 J

ul 2

014

GD

T Av

erag

e W

inni

ng P

rice

Inde

x ($

US/

t)

Historical GDT Price Index

GDT Price Index


Products can be purchased over diverse delivery time periods, known as contract periods. Bidders cannot join a trading event part way through, they must participate in round 1 and can only maintain or decrease their total bid quantities from that point. There is an automatic bidding option for bidders who cannot participate while the trading event is being run. The Trading Manager conducts trading events over a specially designed Bidding Website.

GDT Trading Process The trading process involves five key steps:

1) Five days prior to the start of each trading event, the Trading Manager confirms the quantities available and starting prices for the first round of bidding.

2) At the start of the event, each bidder enters the quantities they wish to purchase at the announced starting prices. The Trading Manager closes the first bidding round after a set period of time.

3) In each successive bidding round, the Trading Manager raises one or more prices and bidders enter new quantities. This continues round-by-round until there no longer is a product with bid quantity greater than the quantity available for purchase (i.e. the available quantity is cleared). At no stage during the process do bidders enter a price. Each customer stays in as long as they enter quantity bids.

4) Shortly after the event has closed, the Trading Manager confirms on the Bidding Website the quantities won and the corresponding FAS (Free Alongside Ship) price in United States dollars per metric tonne.

5) In the subsequent couple of days, the seller contacts the successful bidders to complete the contracting process. Product is then shipped through the seller's standard logistics process.13

13 GlobalDairyTrade Holdings Ltd, 2013


How does GDT ensure the credibility of its prices? GDT auctions are operated by an independent Trading Manager, CRA International, an economics, financial and management services firm listed on the NASDAQ and based in Boston, USA. Trading events are strictly administered according to GDT Market Rules.14 All changes to these rules are overseen by the GDT Advisory Board, which is made up of five representatives of sellers and registered bidders.

What products are sold? In the GDT auction, a variety of diverse dairy products are sold such as:

Whole Milk Powder (WMP) Manufactured by spray-drying fresh pasteurised whole milk. Typically used for its functional and nutritional properties in food and beverage formulations. It is used in further manufacture including Infant and Aged Care formulas, nutritional beverages, ice creams, yoghurts, confectionery, reconstitution of milk and canning operations. It can be used as a replacement for liquid whole milk.

Skim Milk Powder (SMP) Manufactured by spray-drying fresh pasteurised skim milk. Typically used for its functional and nutritional properties in food and beverage formulations. The functional properties included water absorption and binding, solubility, emulsification, foaming and browning. It is used in food and beverage manufacture such as Yoghurt, Ice Cream, Confectionery, Sweetened Condensed Milk, UHT Milk and Bakery.

Anhydrous Milk Fat (AMF) A high quality pure butterfat produced from high quality cream, which undergoes a process that removes nearly all of the water and not fat solids from the finished product. Typically used in food and beverage manufacture such as Ice Cream, Confectionery and Bakery. It can also be recombined with Skim Milk Powder to produce liquid milk and other milk products.

Butter (BTR) Made from high quality fresh cream, consistently delivers the superior flavour and texture needed in many applications, such as baked goods and spreads.

Other Other products sold at the GDT auctions include Butter Milk Powder (BMP), Cheddar (Ched), Lactose (LAC), Sweet Whey Powder and Rennet Casein (RenCas).

14 GlobalDairyTrade Holdings Ltd, 2013


Who buys and sells on GDT? Fonterra along with other overseas dairy firms buy and sell at the GDT trade events for various products, each firm may focus on one particular product to trade in according to the structure of how that firm trades historically and geographically. Here is some brief information about the GDT sellers:

About Fonterra Fonterra’s vision is to be the natural source of dairy for everyone, everywhere, everyday. Fonterra is a global, co-operatively-owned company with roots firmly planted in New Zealand’s rich land, working to unlock every drop of goodness from the 22 billion litres of milk we collect each year and sharing it with the world. Fonterra was a foundation seller on GlobalDairyTrade and today we sell more than anyone else, with products including: Whole Milk Powder (WMP), Skim Milk Powder (SMP), Butter, Anhydrous Milk Fat (AMF), Milk Protein Concentrate 70 (MPC70), Rennet Casein and Cheddar Cheese. Fonterra’s size and our quality products make us the ideal purchasing partner on GDT. Fonterra has transacted over 1.2 million metric tonnes of product and US$9.6 billion on GDT since the 2008 launch.

About EUROSERUM EUROSERUM already exports more than 75% of its dairy ingredients across the world. By joining GlobalDairyTrade, EUROSERUM is seeking to get closer to the market and to work transparently to ensure that its offering provides the best fit with the expectations of clients in different countries around the world. EUROSERUM will be trading Skim Milk Powder on the GlobalDairyTrade auction platform from November 2013.

About Amul The first Amul co-operative, Kaira District Co-operative Milk Producers' Union Ltd., was formed in 1946. Amul since then has been on the forefront by processing and innovating variety of high-grade dairy products such as Amul Butter, Amul Cheese, Amul Chocolates, Amul Ice-Cream, Amul Milk Powder and Amul Flavoured Milk. Most Amul products are leaders in their market segments in India. Amul joined GDT in June 2013, and currently offers Skimmed Milk Powder (Medium Heat and High Heat) and Whole Milk Powder.

About Arla Arla Foods is the world’s sixth largest dairy company, owned by approximately 12,000 Danish, Swedish, German, Belgium, Luxembourg, the Netherlands and UK dairy farmers. We have production facilities in 13 countries and sales offices in further 20, with a total of more than 18,100 employees. Arla Foods handled approximately 10.4 billion kilograms of milk in 2012 and had a turnover of DKK 63 billion in 2012. Arla Foods joined GlobalDairyTrade (GDT) as a seller in 2012 and today sells two Skim Milk Powder products and Butter Milk Powder on the auction.

About DairyAmerica DairyAmerica is the world’s leading Nonfat Dry Milk, Skimmed Milk Powder, and Buttermilk Powder supplier. DairyAmerica is owned by four milk processing co-operatives across the United States, which include Agri-Mark, California Dairies, O-AT-KA Milk Products, and United Dairymen of Arizona.

About Molkerei Ammerland Molkerei Ammerland is one of Europe’s leading dairy cooperatives, owned by more than 2000 dairy farmers located in north west Germany, and processes through its state of the art production facilities more than 1.5 billion kilograms of milk.

Based on our concept of food safety and quality we only process milk from our own farmers and guarantee a self-contained quality chain from the primary production to the finished product.


Drawing on over 125 years of dairy expertise we specialize in cheeses, butter, whey powders, milk powders and fresh dairy products which are sold under the brand Ammerländer - made in Germany - to over 50 countries around the world.

About Land O’lakes Land O'Lakes, Inc., one of America’s premier agribusiness and food companies, is a member-owned cooperative with industry-leading operations that span the spectrum from farm production to consumer foods. With 2012 annual sales of more than $14 billion, Land O'Lakes is one of the nation’s largest cooperatives, ranking in size at #194 on the Fortune 500. Building on a legacy of more than 92 years of operation, Land O'Lakes today operates some of the most respected brands in agribusiness and food production including LAND O LAKES® Dairy Foods, Purina Animal Nutrition and WinField. The company does business in all 50 states and more than 60 countries. Land O'Lakes, Inc. corporate headquarters are located in Arden Hills, MN.

About Murray Goulburn Australia’s largest dairy company, Murray Goulburn (MG) is a co-operative of Australian dairy farmers. The spirit of co-operation has seen MG recognised as a world-class supplier of dairy ingredients and retail products for over 60 years. MG manufactures and markets a full range of dairy ingredients including skim milk powder, full cream milk powder, cheese, milk fat products, whey powders, lactose and milk proteins. A range of retail products are sold under the Devondale brand. In 2011-12, MG handled 2.94 billion litres of milk intake and had A$2.4 of sales revenue. As a seller on GlobalDairyTrade, Murray Goulburn Co-operative Co. Ltd sells lactose produced from high-quality Australian milk.15

15 GlobalDairyTrade, 2013


IMPORTANT DAIRY INFORMATION GDT GlobalDairyTrade data can be found at globaldairytrade.info/ or at www.nzxfutures.com/dairy/events/summary and provides historical, current and pre-event volume and price information from the twice-monthly events to which NZX Dairy Futures cash settle. The DairyTrader The Dairy Trader Website gives details on current report releases and data that is affecting dairy trading globally. The Dairy Trader website incorporates the latest relevant news on the global scene and provides the most up-to-date data for GlobalDairyTrade auctions and NZX Dairy Futures trading. www.dairytrader.co.nz Agrifax Report Agrifax Dairy Report is ideal for understanding the health of NZ’s most influential agricultural sector. In this monthly report, Agrifax provides detailed commentary on commodity prices, exchange rate movements, seasonal payout predictions and production data. Graphs and tables are included that track current prices and identify trends. www.nzxagri.com/agrifax Global Dairy Snapshot Global Dairy Snapshot is regular and compact. It provides up-to-date dairy commodity prices in NZD, USD and AUD for whole milk powder, skim milk powder, cheddar, butter, casein and anhydrous milk fat. A table summarises global dairy price comparisons such as the Agrifax price, NZX Dairy Futures, CME Futures, GDT and USDA. There is detailed coverage of the NZX Dairy Futures Market. It delivers current exchange rates and the Baltic day index, crisp commentary overviews the market. On a regular basis this report enables the reader to develop an increased understanding of the markets. Details on how to subscribe to this report and other NZX Agri publications can be found at www.nzxagri.com


CONTRACT SPECIFICATIONS Global WMP Futures - Individual Contract Specification Unit of Trading 1 tonne (MT)

Price Basis USD/tonne

Minimum Price Movement (Tick Size and Value)

USD5 per tonne (USD5)

Daily Price Limits by Contract Month

Contract Months 1-5 in the current Expiry Calendar: 10% above or below the previous Trading Day's Daily Settlement Price.



Price Limits only apply to a Contract once a Trade has been executed on the Market in that contract.

Price Limits do not apply for 5 Trading Days preceding and including the Last Trading Day.

Contract Months Every calendar month such that 18 months are available for Trading.

Trading Hours As determined from time to time by NZX by notice to the Market in accordance with the NZX Derivatives Market Rules and Procedures.

Last Trading Day Trading shall terminate on the last business day preceding the last GDT Auction of the month i.e. Trading in the March WMP Futures Contract will expire on the last Business Day immediately preceding the last GDT Auction in March (See Expiry Calendar contained in the Contract Terms and Administrative Procedures - NZX Derivatives Market Contract No 1 ("Contract T&Ps")).

Final Settlement Cash settled to the Final Settlement Price calculated by NZX according to an average of winning prices for Whole Milk Powder, Regular - NZ, Contract 2 in GDT Auctions as stipulated in the Contract T&Ps (see Contract Term 8).

Clearing House New Zealand Clearing Limited

Common Trading Facilities

Block Trading Facility √

Exchange for Physicals Facility √

Exchange for Swaps Facility √

Common Trading Facilities Minimum Volume Thresholds

Minimum Volume Thresholds for each Contract or Class of Contracts are specified in Part C, Appendix One of the Procedures.

Exchange Code WMPF

Cross Transactions Minimum Time Period

15 seconds

Position Limits 20,000 Open Positions in any Contract Month

Exchange Rules The Contracts are Traded on the NZX Derivatives Market and subject to the NZX Derivatives Market Rules and Procedures.


Global SMP Futures - Individual Contract Specification Unit of Trading 1 tonne (MT)












Last Trading Day Trading shall terminate on the last business day preceding the last GDT Auction of the month i.e. Trading in the March SMP Futures Contract will expire on the last Business Day immediately preceding the last GDT Auction in March (See Expiry Calendar contained in the Contract Terms and Administrative Procedures - NZX Derivatives Market Contract No 3 ("Contract T&Ps")).

Final Settlement Cash settled to the Final Settlement Price calculated by NZX according to an average of winning prices for Skim Milk Powder, Medium Heat - NZ, Contract 2 in GDT Auctions as stipulated in the Contract T&Ps (see Contract Term 8).








Exchange Code SMPF


15 seconds




Global AMF Futures - Individual Contract Specification Unit of Trading 1 tonne (MT)












Last Trading Day Trading shall terminate on the last business day preceding the last GDT Auction of the month i.e. Trading in the March AMF Futures Contract will expire on the last Business Day immediately preceding the last GDT Auction in March (See Expiry Calendar contained in the Contract Terms and Administrative Procedures - NZX Derivatives Market Contract No 2 ("Contract T&Ps")).

Final Settlement Cash settled to the Final Settlement Price calculated by NZX according to an average of winning prices for Anhydrous Milk Fat, Regular 210kg drum - NZ/AU, Contract 2 in GDT Auctions as stipulated in the Contract T&Ps (see Contract Term 8).








Exchange Code AMFF


15 seconds




Global WMP Option

Underlying Futures Contract

One NZX Derivatives Market Contract No. 1 Global Whole Milk Powder (WMP) Futures Contract

Price basis USD/tone


US$0.50 per tone


None

Contract Months Every calendar month such that 6 months are available for trading


Last Trading Day 1 Business Day prior to the last trading day of WMP Futures

Exercise Price Intervals

All contract months minimum US$50 intervals

Exercise Procedures

American Style (See procedure 3.4 of the New Zealand Clearing Limited Clearing and Settlement Procedures and NZX Derivatives Procedures or contract term 6 of the Options on Dairy Futures Contract Terms and Administrative Procedures).




Exchange for Physicals Facility X

Exchange for Swaps Facility X


Minimum Volume Thresholds for each Contract or Class of Contracts are specified in Part C Appendix One of the Procedures.

Exchange Code W


15 Seconds

Position Limits 20,000 futures-equivalent contracts in any contract month

Exchange Rules The Contracts are Traded on the NZX Derivatives Market and subject to the NZX Derivatives Market Rules and Procedures


Global BTR Futures - Individual Contract Specification Unit of Trading 1 tonne (MT)












Last Trading Day Trading shall terminate on the last business day preceding the last GDT Auction of the month i.e. Trading in the March BTR Futures Contract will expire on the last Business Day immediately preceding the last GDT Auction in March (See Expiry Calendar contained in the Contract Terms and Administrative Procedures – NZX Derivatives Market Contract no 6 (“Contract T&Ps”)).

Final Settlement Cash settled to the Final Settlement Price calculated by NZX according to an average of winning prices for Butter, Unsalted 25 kg – NZ, Contract 2 in GDT Auctions as stipulated in the contract T&Ps (see Contract Term 8).








Exchange Code BTRF


15 seconds



cloud object storage - guide to dairy derivatives · 2017-11-20 · conditions in oceania began to...

Documents