A recent collaboration has emerged in the dairy derivatives market involving StoneX Financial Europe GmbH (SFEG) and Expana, aimed at launching a suite of over-the-counter (OTC) dairy derivatives. These derivatives will be based on Expana’s EU dairy benchmarks, which have received IOSCO assurance. The partnership is set to provide essential risk management tools for the global dairy sector and improve price transparency within this market.
The initial offerings will include contracts for fat-filled milk powder and high-protein whey, with intentions to expand the range to include more dairy products in the future. Users of the StoneX Plus platform will have the opportunity to access Expana’s benchmarks directly through their trading workflows. This integration is designed to enhance the decision-making process for market participants, particularly in the realms of hedging and risk management.
Spencer Wicks, CEO of Expana, emphasized the significance of this partnership, describing it as a pivotal development for the dairy industry. By leveraging Expana’s independent benchmarks alongside StoneX’s expertise in OTC and futures dairy markets, the collaboration aims to foster effective and transparent risk management solutions in the sector.
Similarly, Liam Fenton, the Global Head of Dairy & Food Group at StoneX, highlighted that clients in the dairy industry are actively seeking innovative methods to handle risk and navigate market fluctuations. The collaboration with Expana is poised to provide reliable and independent benchmarks that can enhance liquidity, support transparent pricing mechanisms, and fortify risk management efforts throughout the industry.
The collaboration underscores a trend within the dairy sector as market participants increasingly prioritize robust risk management strategies amidst ongoing volatility. By establishing a suite of OTC dairy derivatives linked to recognized benchmarks, the partnership stands to create a more organized and transparent trading environment, ultimately benefiting stakeholders across the global dairy supply chain.