Fonterra Global Dairy Trade (GDT) Auction

Published 18 August 15

Fonterra’s Global Dairy Trade (GDT) auction is held twice a month. This page shows the price changes between auctions for different products in the form of GDT Price Indices*. For further information please visit the GDT auction site.

Auction summary for 18 August 2015:

  • The latest auction showed a 14.8% increase in the overall GDT Price Index.
  • Increases were seen across all products except butter milk powder and lactose.
  • The weighted average price across all products now stands at US$1,974/tonne.
  • The biggest increase in Price Index was for anhydrous milk fat (AMF), which rose 26.6%.
  • SMP and WMP also showed strong increases of 8.5% and 19.1% respectively.

The next auction is due to take place on Tuesday 1 September 2015.

 Fonterra table

Source: Global DairyTrade platform

Data marked with an “*” indicates that the reported change is computed relative to two trading events prior to the current event because no quantity was offered or sold in the preceding event. "n.a." indicates no quantity was offered or sold in either the current event and/or in the prior two events or that the prices published for individual products within a group were insufficient for the index to be calculated.

 Fonterra auction

 Notes to the auction

*GDT Price Indices essentially provide a value-weighted average of the percentage changes in prices. This helps avoids bias that can be introduced by using simple weighted average winning prices, giving a more accurate reflection of price movements between events. They are calculated as value weighted, chain-linked Fisher indices.

The indices use GDT 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 GDT auction started operations on 3 July 2008 and takes place bi-weekly on an online trading platform called GlobalDairyTrade. Sales results from GlobalDairyTrade provide a global benchmark for commodity prices.

Six contracts are made available, corresponding to future delivery periods. For example, 'contract period 1' provides for products where the shipment period is the first month after the month of the trading event and 'contract period 6' means that shipment begins six months after the trading event. The use of six contract periods has been in effect since April 2012.

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.