The European Energy Exchange (EEX) is to expand trading in dairy products with a Liquid Milk Future, on 15 August 2018, becoming the first exchange in Europe to offer such a product in the process.
So far, EEX offers trading with futures on butter, skimmed milk powder and whey powder.
The contract volume is 25,000 kilogrammes. For the financial settlement of the new product EEX uses the “EEX European Liquid Milk Index”. This index is equally composed of milk prices from Germany, the Netherlands, Denmark and Ireland. The prices are based on the European Commission’s “Milk Market Observatory” in accordance with (EU) No. 2017/1185 Article 12 (a) – Annex II.4(a).
“With the expansion of the product range we comply with the needs of the European dairy markets and enable our customers to hedge against price risks with even higher precision,” says Sascha Siegel (pictured), Head of Agricultural Commodities at EEX. “The development of butter, skimmed milk and whey powder prices over the last years has shown that the European dairy markets are subject to significant price tensions. We are convinced that the new product is an attractive supplement to risk management in the agricultural markets.”
EEX has offered trading in agricultural products since 11 May 2015. In 2017, 137,820 tonnes of commodity equivalent were traded on the EEX dairy derivatives market. As a result, the volume increased by 68 per cent against the previous year (2016: 82,050 tonnes of commodity equivalent), underlining EEX’s position as Europe’s leading trading platform for dairy derivatives.
The European Energy Exchange (EEX) is the leading energy exchange in Europe which develops, operates and connects secure, liquid and transparent markets for energy and related products. As part of EEX Group, a group of companies serving international commodity markets, EEX offers contracts on Power and Emission Allowances as well as Freight and Agricultural Products. EEX is part of Deutsche Börse Group.
