Mintec proposes to assess its German Cream MBP on a 100% fat basis

All Market Notes 03 May 2022

Mintec proposes to change the methodology of its Mintec Benchmark Prices for Cream Bulk 40% EXW Germany with the Mintec Code JR92 to be assessed as a 100%-fat level instead of being assessed at a 40%-fat level.

Mintec is soliciting feedback on this proposal until Wednesday, 1 June 2022, and is proposing for this methodology change to come into effect on Thursday 7 July if supported by the industry.

The proposed methodology change brings this assessment in line with the typical convention seen in Germany for the cream trade. This proposed change would see the benchmark thus become even more reflective of the terms of trade in the region and provide greater transparency and usefulness for benchmarking to market participants.

The current methodology sees the assessment made on a 40% fat equivalent basis. This means that any price points received from industry participants on a 100% fat basis are converted to a 40% fat basis by multiplying the price by 40%. Under the proposed methodology change, this step would simply be omitted for assessments after the change on 7 July 2022.

The proposed methodology change would mean that all historical data for this assessment (Mintec Code JR92) would be amended to reflect a 100% fat level assessment. This means that all assessments prior to the methodology change date, if the proposal is supported by the industry, would be divided by 0.4 (40%).

The below table shows what the effect on price points would be, taking April 2022 as an example:

This methodology change would take effect on Thursday, 7 July 2022.

Full details of the current methodology can be found in the Mintec Assessment Specifications Guide available here.

Please send any feedback about this proposal to methodology@mintecglobal.com by Wednesday 1 June, and clearly state which market note your comments relate to, and if comments are intended for publication by Mintec.

Mintec will acknowledge receipt of all comments by email.