In 2013, Eurex Exchange reached several all-time highs in its agricultural derivatives segment. The number of traded contracts of all products totaled 57,389 contracts, an increase of 7 percent year-on-year and 3 percent compared with the previous record year 2011. Further, a new annual record was set in potato futures with 53,947 contracts and all three dairy futures with a combined notional value equivalent of about 12,000 tonnes (equalizing around 2,400 contracts), a surge of 164 percent versus 2012. The achievements in 2013 are a clear indication that Eurex Exchange has become the leading risk management exchange in Europe for both potato and dairy futures.
“We are very pleased with the development of Eurex’s agricultural futures over the last years. The future on European Processing Potatoes is a very reliable price risk management tool for all layers of the underlying market value chain in Central Europe. As an industry/wholesalers association we will continue to support the further development of this needed derivatives instrument,” said Rene van Diepen, Director of Nederlandse Aardappel Organisatie (NAO).
Bruce Turner, Director Commodity Risk & Trading, Fonterra, added: “The record volumes of Eurex’s dairy futures in 2013 are a very positive sign and illustrate the value of an exchange in this sector. In times of structural changes in the European dairy market as well as continuing volatility in dairy products listed derivatives present an excellent opportunity to hedge risk and lock in prices.”
The Eurex Exchange agricultural derivatives are aimed at a broad group of clients, including farmers and farming cooperatives, trading companies, dairies, slaughterhouses and the processing industry. The exchange-listed derivatives give these user groups transparent and liquid hedging instruments against standard market price fluctuations. Exchange-listed agricultural derivatives also mitigate the counterparty risk because these contracts are centrally cleared via Eurex Clearing.
The Eurex offering currently comprises six agricultural futures on butter, skimmed milk powder and whey powder, European processing potatoes, as well as hogs and piglets. All futures are based on recognized reference prices from the relevant cash markets and are settled in cash.