Agribusiness Price Risk Management
Agribusiness Price Risk Management
|
|
|
How it works
You can fix a price, select a price range or set a price floor/cap, up to 3 years in advance for certain commodities (subject to approval).
How it helps you
-
plan and budget with greater accuracy
-
better control your margins
-
reduce the worry of monitoring prices on overseas commodity exchanges
Key features include
- a hedge limit based on a percentage of your underlying production, trade or procurement exposure
- hedge can be denominated in AUD or a foreign currency - an AUD denomination will remove the need to set up a foreign exchange hedge (see table below)
- maximum hedge term of up to 3 years (see table below)
- firm intra-day pricing in your time-zone, while you work, not while you sleep
- no exchange traded brokerage fees or daily margin calls
- no requirement to physically deliver your commodity
- up-to-date market intelligence sourced locally and from abroad – you receive strategy reports on a regular basis to help you make the most effective hedging decisions in line with your long-term business goals
- solutions may provide you with marketing independence
- our risk management specialists will help you create your own risk management strategy – it is recommended that you obtain advice from an Independent Licensed Futures Adviser (ILFA) to make sure that you fully understand the hedging strategy and its associated risks
Agribusiness Price Risk Management Solutions
| Contract Specifications | ||||||
| Commodity | Maximum Term (Years) | Minimum Quantity | Unit of Measure | Choice of Currency | Pricing Reference (Futures / Exchange) | Hedging Strategies |
| Canola | 3 | 50 | metric tonnes | AUD or CAD | Winnipeg Commodity Exchange (WCE) | Swap, Floor, Cap, Collar, Participating Forward |
| Corn | 3 | 100 | metric tonnes | AUD or USD | Chicago Board of Trade (CBOT) | Swap, Floor, Cap, Collar, Participating Forward |
| Cotton | 3 | 100 | bales | AUD or USD | New York Cotton Exchange (NYCE) | Swap, Floor, Cap, Collar, Participating Forward |
| Sugar | 3 | 100 | metric tonnes | AUD or USD | Coffee Sugar & Cocoa Exchange (CSCE) | Swap, Floor, Cap, Collar, Participating Forward |
| Wheat | 3 | 100 | metric tonnes | AUD or USD | Chicago Board of Trade (CBOT) or Kansas City Board of Trade (KCBOT) | Swap, Floor, Cap, Collar, Participating Forward |
| Wheat | 2 | 100 | metric tonnes | AUD | ASX Milling Wheat | Swap |
