The growth of dairy futures trading on the NZ stock exchange increases the risk of dairy price volatility and adds to the financialisation of the sector. The New Zealand Herald recently reported that NZX dairy futures trading has passed the 10,000 lot mark for the first time since its inception – a milestone that means the market is well on the way towards reaching critical mass, says head of derivatives Kathryn Haggard. Defining critcial mass as being 150 lots per day compared to about 130 per day at present,she said that the market has exceeded expectation. The first 5000 lots were traded in the first 12 months and the last 5000 were traded in the last 6 weeks.
“While the market might be cheering, the 270,000 children living in poverty in New Zealand have parents who are struggling to afford to put milk on the weekly grocery list because of its increasing unaffordability” said NZDWU national secretary James Ritchie. “All this in a country that produces more than 20 times the amount of milk that it needs for its own domestic market.”