The European Energy Exchange (EEX) is planning to launch a liquid milk future in the first half of 2018, subject to the approval of the Exchange Council.
EEX will be the first European exchange to offer a liquid milk product for trading. The contract size will be 25,000 kgs and the future will be settled financially against a liquid milk index which is currently being developed by EEX.
“Generally liquid milk can already be hedged synthetically at EEX by trading butter and skimmed milk powder contracts. With the introduction of liquid milk futures we will offer an additional direct price hedging tool, in particular for dairies whose output is not focused on butter and powder as well as milk producers,” says Sascha Siegel (pictured), Head of Agricultural Commodities at EEX.
EEX has offered trading on agricultural underlyings since the 11th May 2015. The trading volumes of risk management instruments on dairy products ( butter, skimmed milk powder and whey powder) in particular has grown continuously. At 82,050 tonnes of product equivalent (corresponding to 16,410 contracts), EEX achieved a new annual record on the derivatives market for dairy products. Since the beginning of 2017, 92,700 tonnes have been traded at EEX – and, hence, more than in the entire year 2016.