GDT Price Index in New Zealand

The outcome of GDT Events, the twice-monthly electronic auction of dairy products (whole and skim milk powder, butter, anhydrous milk fat, cheese...) run by GlobalDairyTrade. Although the market is global, it is tied to New Zealand because Fonterra supplies much of the volume and the result moves the New Zealand dollar.

The GDT Price Index is a weighted index of the winning sale prices from the auction, in US dollars per tonne, across a basket of products and delivery contracts. The headline figure is the change in the index from the immediately preceding auction (usually the first and third Tuesday of each month).

It is the international benchmark for dairy prices and previews the price Fonterra will pay farmers. Rising auctions tend to lift the New Zealand dollar, a key export earner, and point to higher sector income, while falling ones do the opposite.

It captures only the volume auctioned at GDT Events, not the whole global dairy trade, part of which is sold under bilateral contract off the platform. The change can be volatile from one auction to the next owing to seasonal supply shifts or changes in the basket offered, and it is not an official statistic but the result of a private auction.