April 17, 2008

Fonterra introduces online sales channel
 

Dairy giant Fonterra is launching a new internet-based sales platform for its internationally traded commodities, a first for the global dairy industry.

The site, which will be called globalDairyTrade, will sell up to 20 percent of Fonterra's New Zealand-sourced commodities.

In the first year, about NZ$1 billion (US$787.1 million) of milk powder is expected to be traded, with volumes increasing over time. Other commodity groups will be added throughout the year.

Once globalDairyTrade is set up, Fonterra expects to open it up to its supply partners and even its competitors, which could possibly lead to improved price transparency and electronic trading in the global dairy market.

An international dairy futures or derivates markets similar to other commodities such as oil, sugar and coal may develop.

The new platform will let Fonterra and its customers to be more responsive to changing global prices, said Andrew Ferrier, Fonterra chief executive.