SINGAPORE, May 7 (Reuters) - S&P Dow Jones Indices is planning to launch an index for the global dairy industry by end of this year, a senior company official told Reuters on Tuesday.
Demand for dairy products in Asia, led by China, has been climbing rapidly in recent years as people with higher incomes turn to protein-rich foods.
"We are trying to do an index in the dairy space, skimmed milk powder to start with," said Fiona Boal, head of Commodities and Real Assets at S&P Dow Jones Indices.
"We are doing that at the request of the industry, ... reason being is that they felt they are left out of financialisation of commodity markets."
She said the planned index will take into account markets in the United States, Europe and New Zealand.
"(We plan to launch it) maybe by end of this year. There are some challenges around creating a global index, for how we weigh the index," she told Reuters, adding that the index would likely be trade-weighted rather than production weighted.
"You want the index to be useful to farmers and investors."
Last week, New Zealand dairy group Fonterra Co-Operative Group Ltd said that local milk production in March dropped 8 percent year-on-year, but exports rose as Asian demand remained robust.
Exports from New Zealand surged 27 percent in February, the world's largest dairy company said in a statement, with shipments to China increasing 11 percent over the month.
Boal said the dairy industry was keen on adding liquidity.
"It is an interesting example where the industry thinks that by adding additional liquidity... is highly valuable." (Reporting by Naveen Thukral; editing by Christian Schmollinger)