Friday, March 29, 2024

Global Dairy Trade makes rule changes

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The Global Dairy Trade Events Oversight Board has adopted three proposed rule changes designed to enhance transparency and enable more services to be developed.
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The rule changes extended the cessation notification period, enabled the establishment of multi-seller pools and would expand the conditions under which GDT winning prices were published.

GDT would now provide six months’ notice of any intention to discontinue the trading platform and sellers whose winning prices were used to settle financial instruments would provide six months’ notice of any intention to cease offering their products on GDT events.

Other changes would allow sellers to offer supply of standard product specifications in one or more multi-seller pools on GDT events.

GDT would publish the identity of participating sellers but no information about whether a seller was participating in a particular trading event or the offer quantities of each seller.

The first pool was expected to be launched for United States-sourced generic lactose products later this year.

The third change would reduce instances of not published data due to the winning prices being the same as starting prices. The technical change would be completed within the next three months, at which point GDT would publish all prices that were deemed to be market-determined.

AgriHQ chief analyst Susan Kilsby said “A reduction in the incidence of non-published prices will be welcomed by the dairy industry.

"The GDT price indices are supposed to help simplify price movements across multiple grades of product and delivery periods but at times have added further confusion.

"There have been incidents when the index prices were not reflective of the general movement in the dairy commodities traded at a particular event because non-published prices were not able to be used in the calculation."

Global Dairy Trade director Eric Hansen said the changes “enable GDT to develop new services and further strengthen the systems and processes we use to provide credible reference prices for globally traded dairy ingredients”.

Oversight Board chairman Bill Shields said “These changes received widespread support from buyers, sellers and financial market members of the Oversight Board and drew similar levels of support from public consultation.

“These are the first rule changes adopted since the Oversight Board was formed in 2016 and as such represent an important step forward for Global Dairy Trade’s transparency and expansion.”

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