New Zealand's Fonterra announces new dairy price index

Fonterra, a New Zealand dairy company, will be publishing a globalDairyTrade Trade Weighted Index (gDT-TWI) after the next auction takes place tomorrow, the dairy co-operative announced today.

The gDT auction platform is important in setting commodity prices for milk solids.

Its growth means that it now captures up to 30 prices over a number of products and contract periods.

According to Fonterra the new trade weighted index addresses the need for a constant ''headline'' number that tracks the market for these products.

The index shows the percentage change in the average price of a basket of the products currently traded on gDT--whole milk powder, skim milk powder and anhydrous milk fat.

It is calculated by taking the percentage changes in prices in a gDT event and weighs them based on total international dairy product trade flows.

However, it does not show any prices. Instead it shows an index with 1000 for the base month of March 2010.