Amsterdam, Brussels, Lisbon and Paris – 27 November 2014 – Euronext today announced that it will launch a dairy derivatives complex in spring 2015. The full suite of futures and options will cover the three key dairy products currently traded in Europe and internationally: butter; skimmed milk powder; and whey powder, allowing the European dairy community to hedge its exposure to price fluctuations in this volatile market, just as the milk quotas expire in the European market. This launch is subject to relevant regulatory review.
The European market is the world leader in dairy production and the second largest exporter of dairy products worldwide. On 31 March 2015, milk quotas, originally initiated under the EU’s Common Agricultural Policy, will expire leading to liberalization of production and potential increased volatility in the European dairy industry. In addition, global demand for milk is increasing whilst supply chains can be unpredictable. Within this context this new product complex will allow the industry to manage their risk more smoothly in a transparent, regulated and liquid market.
Michel Portier, CEO of European leading Agricultural consultancy Agritel said, “This is an important initiative as it provides a set of tools to address the alignment of dairy prices in Europe with the international market at a time when the dairy industry will need to adapt to the end of quotas. We are delighted to have been associated with this industry-driven initiative and fully support Euronext in this endeavour.”
Olivier Raevel, Head of Commodities at Euronext, said, “This is yet another example of Euronext’s innovative approach to economic situations where our clients are seeking solutions for their hedging needs. As the leading Eurozone exchange, we are ideally placed to service the needs of the industry at this crucial time in its history when European milk quotas end, by offering a full dairy complex.”