But there will be significant differences between the new 24/7 system, and the existing twice-monthly auction, which will continue in its present form.
The twice-monthly auction, which sets the farmgate milk price that Fonterra farmers are paid, will remain unchanged but is now called GDT Events.
The new 24/7 trading platform, called GDT Marketplace, will offer a place to trade between individual business buyers and sellers, and prices will be confidential.
GDT director Eric Hansen said there would a «soft launch» of the system over the next 12 months, with Global Dairy Trade’s parent Fonterra being the first seller.
He said GDT was in discussions with sellers in Europe and the United States.
«Once we’ve been through that initial process it will then be open to any genuine dealer in dairy products,» Hansen said.
The platform would be available to any of the other seven New Zealand dairy companies.
«Our objective is to create the most highly tradeable marketplace that we can, and it doesn’t matter whether it’s a New Zealand or overseas company, they will all be welcome.»
Asked how it might change the dynamic of the twice-monthly auction, Hansen said it was envisaged the two platforms would serve different purposes.
«We see the GDT Event, as it’s now called, as the best venue for large volume, standard products to be sold, where a large volume of bidders is concentrated at one time.
«GDT Marketplace will be more like a global shop front where buyers and sellers can buy a wider range of products, from casein, cheeses, various milk powders which aren’t sold on GDT at present,» Hansen said.
Federated Farmers dairy spokesman Andrew Hoggard said it was difficult to predict the impact of the new system on trading.
«It seems to be the way the world is going, with more online trading.»
He did not think it would have any impact on the price farmers are paid by Fonterra.
«If they are able to get more sales at higher prices then they will just get marked up as value add, so that will go into the dividend stream,» Hoggard said.
Whether the new system would ever replace the twice-monthly GDT Events was a question for the future.
«Look at Trade Me, Alibaba, Amazon and Uber. and how they’ve gone. It may be that in the future everyone will want to move to the 24/7 Global Marketplace,» Hoggard said.
Fonterra’s managing director global ingredients, Kelvin Wickham, said the new GDT Marketplace provided an additional sales channel for NZMP Ingredients and met growing demand in the dairy market for online business-to-business transactions.
«Online trading is ideal for customers purchasing smaller volumes who want convenience and availability at a time that suits them. We see this as an opportunity to grow our sales both with existing customers and as an ideal way to reach new customers over time,» Wickham said.
Wickham said Fonterra welcomed the introduction of a cream grouping in the twice-monthly GDT Events from June. Cream is used to manufacture either butter or anhydrous milk fat (butter with the water removed).
GDT Marketplace will offer products via fixed price or closed tender listings.
GDT is also overhauling the data generated from the twice monthly auctions, with some of it available only on a subscription basis. It will be called GDT Insight.
ASB rural economist Nathan Penny said that up until now organisations like his that used the data for their analysis received it for free, but now they would have to pay.
The data was valuable enough that companies would be prepared to pay for it, he said.
Source: Stuff