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GDT Events frequently asked questions

1. Who is involved in GDT Events?
2. What delivery timeframes are available on GDT?
3. When do Trading Events take place?
4. How do GDT Events work?
5. What is the GDT Price?
6. Can I see the results for other bidders?
7. How are Price Indices calculated?
8. Why become a GDT Events bidder?
9. What costs are involved for GDT Events bidders?
10. Can bidders buy product from any seller?
11. What destinations can bidders send product to?
12. Why become a seller on GDT Events?
13. What is the link between GDT Events and NZX?
14. Are there any barriers to joining GDT Events?

1. Who is involved in GDT Events?

GDT Events connects sellers from around the globe with 500 bidders from 88 countries.

Owned by Fonterra Cooperative Group, GDT Events operates separately and independently from its owners with audited separation protocols in place. 

To further protect and maintain the integrity of GDT Events, an independent Trading Manager conducts all auctions. The independent Trading Manager must comply with the GDT Trading Event Rules regarding the conduct of each auction. An independent Trading Manager is vital to maintain the integrity of the GDT Events platform and the confidence of the global dairy market.  By using an independent Trading Manager, we can be sure that each Trading Event is run independently from all participants.

The Trading Manager is CRA International, Inc. d/b/a Charles River Associates (CRA), an economics, financial and management consulting services firm listed on the NASDAQ and based in Boston, USA. CRA is known globally for its specialist knowledge and expertise in the design of auctions and other trading systems. CRA is responsible for conducting each Trading Event.

The GDT Events Oversight Board represents the interests of the parties trading on the GDT Events platform and oversees GDT Events operations. The GDT Events Oversight Board is made up of four registered bidders, four registered sellers and three representatives of financial markets. The GDT Events Oversight Board reviews any proposed changes to the GDT Trading Event Rules and ensures the operation of the trading platform is in accordance with its guiding principles.

2. What delivery timeframes are available on GDT?

Sellers can offer products in any of six contract periods, each one representing a month when product is shipped.  The diagram below shows the six contract periods available for Trading Events in May.

Shipment screen shot

Sellers and bidders choose which contract periods they wish to offer/purchase, and this provides a useful method for both parties to manage their price exposure.

3. When do Trading Events take place?

Trading Events operate twice a month at 12:00 UTC. See calendar for specific dates.

4. How do GDT Events work?

The Trading Manager conducts Trading Events on the Bidding Website, where bidders bid on the quantity they wish to purchase at announced prices through a series of timed rounds. Trading Events last approximately 2-3 hours.

a)    Five days prior to the start of each Trading Event, the Trading Manager confirms the quantities available and starting prices for the first round of bidding, and this information becomes available for registered bidders to view. 

b)    At the start of the event, each bidder enters the quantities they wish to purchase at the announced starting prices.  The Trading Manager closes the first bidding round after a set period of time.

c)    In each successive bidding round, if the total bids are greater than the quantity on offer, the Trading Manager raises the price and bidders enter new quantities.

d)    This continues round-by-round until there no longer is a product with bid quantity greater than the quantity available for purchase (i.e. the available quantity is cleared).

The diagram below illustrates a typical Trading Event (for one product/contract period)

how GDT Events work

At no stage during the process do bidders enter a price.  Shortly after the event has closed, the Trading Manager confirms on the Bidding Website the quantities won and the winning price.

Following the Trading Event, the bidders are contacted by the seller to complete the contracting process. Product is shipped through the seller's standard logistics process. 

5. What is the GDT Price?

Unless otherwise specified on the Bidding Website, all starting prices, announced prices, and winning prices for products offered at Trading Events are stated in US dollars per MT (USD/MT) and are specified on a Free Along Side (FAS) basis at the specified shipment locations. 

Starting prices are the prices at which each product is offered for the first round of bidding.

Announced prices are the prices announced at the start of each subsequent round.

Winning prices are the final prices at the close of the auction.

The price paid by successful bidders will be the winning price. All winning bidders pay the same FAS price. Winning bidders may be required to pay freight rates, insurance and any ancillary charges previously specified between the sellers and bidder.  These charges are notified to all registered bidders prior to each Trading Event in the bidder contracting information file.

GDT publishes all winning prices that are higher than their starting prices or ‘market determined’.  A Winning Price is assessed as being ‘market determined’ in any circumstance where bidding demand was sufficient to cause an increase in Announced Price from the Starting price, irrespective of whether bidding demand was or was not sufficient to result in the Announced Price becoming the Winning Price at the close of the Trading Event.  

Where product is sold at its starting price and non-market determined, anti-trust compliance considerations prevent GDT Events from making these prices publicly available.  This can occur when demand for that product is lower than the maximum quantity offered by the seller (in which case a price increase is not warranted), and when only some, but not all of the offered quantity is sold. 

6. Can I see the results for other bidders?

Although you cannot see who won a particular product, the winning prices for each product/contract period are available on this website following the event.   Results are published on the Results page shortly after the Trading Event. The quantities purchased remain confidential to the seller and successful bidder.  

7. How are Price Indices calculated?

The GDT Price Index uses a weighted-average of the percentage changes in prices.  GDT Price Indices are used to avoid the bias of a simple weighted average price, and to give a more accurate reflection of the price movements between Trading Events.  As explained in question 10, only winning prices that are higher than starting prices are included in the price index calculations. More details on the calculations can be found on the briefing note from our GDT Price Index page.

8. Why become a GDT Events bidder?

GDT Events bidders gain access to a large and increasing range of commodity products from sellers around the world, and can be assured of paying a competitive, market-determined price at each Trading Event.

As a bidder on GDT Events, you decide when and how much you purchase, and how far forward you want to secure product.  You have flexibility during the auction to switch your bids between products, contract periods and sellers (subject to eligibility).

GDT Events ensures a level playing field where all bidders are treated equally, irrespective of size, region or purchase history.  All winning bidders pay the same price for the same product. 

9. What costs are involved for GDT Events bidders?

No fees, bonds, deposits or upfront charges of any kind are required from bidders to become a registered bidder or to participate in Trading Events. 

10. Can bidders buy product from any seller?

Bidders can only purchase product from a seller if that seller has granted them eligibility.  Prior to each Trading Event, sellers review the full list of all registered bidders, and allocate eligibility to those they wish to sell to.  We encourage bidders to contact sellers to discuss eligibility and any other supply terms.

11. What destinations can bidders send product to?

As a registered bidder, your individual bidder contracting information file (BCI) specifies the products that you may purchase from each seller and the ports that the seller will ship these products to.  The BCI file also lists any additional charges that may apply.  You can check your BCI files by logging into MyGDT before each Trading Event. 

Sellers have no obligation to ship to a country that is not listed on a bidder’s BCI file, or has not been agreed between the bidder and the seller prior to purchase.  If the country that the bidder wishes to ship to is not listed in the BCI, please contact your seller representative.

12. Why become a seller on GDT Events?

GDT Events brings bidders and sellers together and provides a process for setting a fair price.  Joining GDT Events as a seller does not interfere with customer relations; in fact, it strengthens them through more regular contact without bargaining tension. Sellers retain the key relationship, including continuing to manage all aspects of contract execution.

Sellers have full access to all registered bidders. Each seller determines which bidders they are willing to trade with and are encouraged to market and promote their products to maximise bidder interest.

GDT Events closing prices represent the current market price for commodity products, thus they provide a foundation for each seller to measure their value added activities. Sellers can be confident that their product will be sold to those willing to pay the current market price, enabling them to focus more of their effort on creating additional value for their businesses.

13. What is the link between GDT Events and NZX?

NZX and GDT Events are separate entities. However, NZX uses GDT Events winning prices to settle against dairy futures contracts that it sells. For more details on dairy futures contracts, go here.

14. Are there any barriers to joining GDT Events?

All sellers and buyers who genuinely sell or purchase dairy ingredients products can join the GDT Events platform.  The only exception to this are companies located in a country under UN or US sanctions.  Furthermore, companies located in a non-sanctioned country cannot specify shipping destinations to sanctioned countries.

GDT Events sanctions policy is based on legal advice relevant to all countries where GDT Events has an interest, and this includes the US where the GDT Events Trading Manager CRA International Inc are located.