According to the OECD-FAO Agricultural Outlook for the next 10
years, the global production of fluid milk would experience a
record increase of 178 Mt, or 22%, compared to the 2014-2016 base
period. Developing countries would be showing the highest annual
growth rates, particularly India and Pakistan. In fact, India will
be the largest global producer by 2020. In the case of Argentina,
it will remain as an important exporter of milk powder. Meanwhile,
Bolsa de Comercio de Rosario and Rofex are working on developing
financial instruments to accompany the growth of the sector.
Part of the article is related to the dairy sector according to the OECD-FAO Agricultural Outlook 2017-2026. Since it is a
summary of the original edition, it is not translated. Therefore, we
encourage reading the full work
Bolsa de Comercio de Rosario and dairy sales contracts
Argentina occupies a relevant role in the dairy business. According to data
from the Observatory of the Argentina Milk Value Chain, exports of whole
milk powder (WMP) reached 110,000 tons in 2016, positioning the country as
the fourth largest exporter, behind Uruguay, which occupies the third
place. In the first eight months of 2017, Argentina exported about 36,000
tons of WMP, 27,200 tons of cheeses next to 12,000 tons of skim milk powder
(SMP), according to data from SENASA.
Bolsa de Comercio de Rosario (BCR), as a promoter of the development of
markets, has been working in various projects for several years aimed at
providing services to the Argentine dairy market, working with institutions
and stakeholders of the sector.
One of the main objectives is the creation of a milk supply-purchase
contract that would make it possible to move towards a progressive
institutionalization of the dairy market. Among the advantages of this
instrument is the possibility of improving access to financing, as it is
evidenced from a recent proposal by Banco Nación (autarchy bank of the
National Government) consisting of a new line of credit for dairy
producers. For the first time in the history of Argentine dairy financing,
the Bank’s circular referring to this line of credit includes the
possibility of concluding contracts for the sale of milk and the
possibility of ceding the flow of future funds of such commercial
operation. On the other hand, there is another initiative of the Government
of the Province of Santa Fe and local dairy producers to organize a milk
brokerage house that would use these contracts for the sale of registered
milk in the BCR, which would in turn provide arbitration services.
Amongst the services that Bolsa de Comercio de Rosario has developed for
dairy producers we can find:
· Proposed contract model for the sale of raw cow milk with registration at
Bolsa de Comercio de Rosario.
· Arbitration services for conflicts arising from registered contracts.
· The entity offers to work alongside milk producers and processors in the
development of financing tools based on milk purchase agreements.
· Development of milk futures contracts working alongside ROFEX and MATBA.
ROFEX and MATBA have worked with the Milk Industry Under secretariat of the
Ministry of Agroindustry on the development of milk futures. As a result, a
proposal for a milk futures contract based on an index of average prices
paid to producers according to purchase statements required by the Ministry