Article Thriving in the New Global Agribusiness Environment

Thriving in the New Global Agribusiness Environment

Executive Summary

Today’s global agribusiness organizations face unprecedented levels of complexity as their trading and risk environments have changed. Shifting and volatile markets, the use of multiple disparate and often outdated systems, and a lack of visibility into their operations have left organizations pondering how to simplify these complexities and better manage their risk. Wherever your firm is positioned in the value chain, regardless of its focus—grain, oilseed, coffee, cocoa, or any other commodity—the world has and will continue to change. Adapting to these changes has never been more crucial.

Recent price dynamics have amply demonstrated that even subtle forms of risk can compromise hedge effectiveness amidst some of the most benign market environments.

For example, recent bumper crops have eased input costs for certain firms, such as those involved in grains or oilseeds, but, if history is any guide, the relative stability of margins will not continue for long. Such flux in the markets forces organizations to rethink their approach to stay ahead of the curve and become proactive rather than reactive in their decision making process.

A commodity trading and risk management (CTRM) solution can provide the transparency and simplicity your business demands in this new environment. A CTRM system provides several key benefits that are explained herein and include:

  • Consolidating disconnected data from multiple, obsolete systems into one system for transparency across the organization and a complete view of financial and physical risks, including quantity and quality across the value chain
  • Increasing capital efficiency and implementing more effective hedging strategies across the supply chain to maximize revenues and profitability
  • Accessing global prices and transportation rates in real time to capitalize on optimal market positions and arbitrage opportunities
  • Improving reporting capabilities while integrating with third-party financial software to allow for automatic and accurate calculations, maximizing the existing corporate infrastructure

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