Eurex to launch futures on butter and skimmed milk powder

Eurex to launch futures on butter and skimmed milk powder

Derivatives exchange Eurex will offer trading of two futures based on butter and skimmed milk powder in Europe at the end of Q2 2010.

Both futures are based on established reference prices from the respective spot markets and will be settled in cash.

“We along with major market participants believe that the volatility of dairy markets will increase over the next few years. The use of derivatives to hedge against higher prices and fluctuating costs is expected to rise, thus the introduction of our new futures is a logical step,” says Peter Reitz, member of the Eurex executive board. “We also want to contribute our known strengths, particularly our global distribution network and central clearing services, to this growing market.”

Eurex has prepared its market launch together with key players in this market segment, including the German and European dairy industry associations (MIV and Eucolait) and important market participants in the European and US dairy industry.

The participants in the spot market for these agricultural products have indicated a keen interest in collaborating with a major international derivatives exchange.

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