Consultancy
Tailored consultancy on risk
management and hedging tools.
During the last few years, globalization has brought grain and oilseed markets to a complex and interconnected environment. Therefore, more skilled professionals are required in the sales and purchasing departments of the
agri-food industry.
In order to increase the competitiveness of these professional teams, we offer customized advice on risk management, sales and/or purchasing efficiency and value-chain optimization.
Furthermore, to minimize the impact of market fluctuations, we offer our clients access to hedging tools (futures and options) as “price insurance”, which ensure margins and maximize the profitability of their business.
Our in-depth knowledge of the Spanish and European markets enables us to offer a complete service for the national and international agri-food industry.
Client
benefits
Clients advised by AESTIVUM:
- Operate efficiently in their market and better quantify the risk for purchase and/or sale operations.
- Ensure their margins through “price insurance” and hedging tools (futures and options). To that end, we rely on the best national and international collaborators, market analysts, and hedging tools providers.
- Have access to accurate global market information, as well as customized reports in their area of interest. This allows them to better understand the relationship between the global market and their local situation.
- Benefit from the advice and support of acknowledged professionals in the sector, allowing them to operate with greater efficiency than their competitors.
AESTIVUM offers its dedication and resources equally to both big and small clients, leading them to their proposed position. Because every client’s needs differ, we customize our services for each situation. And of course, we guarantee complete confidentiality and discretion in all our operations.
Case
studies
01.
Advice to a meat integrator to improve margins.
Client
problem
The compound-feed purchasing department of a meat integrator is concerned about its margins: the team has always followed the same purchasing strategy for grains, protein meals, vegetable oils, and animal fats. But lately, it does not work very well. Agricultural commodity prices are increasingly volatile and more difficult to manage. How can the meat integrator increase its margins again?
AESTIVUM
solution
- Together with the purchasing department, we analyze the current supply system – quantities, purchasing time, pricing method, feed ingredient origins, price, risk management – to determine the reasons for the fall in margins.
- We propose solutions: we offer the team the necessary tools to manage commodities prices and to better quantify their risk.
- We design a new risk management strategy that enables the department to closely monitor the global and local markets. They learn how to break down prices, optimize the bases and futures component when applicable, and form a market opinion, including the possibility of using “price insurance” (futures and options). All this is accompanied by the training the team needs.
- While the new strategy is being implemented, we evaluate the results to improve and modify actions if necessary.
- Once the department is working efficiently and cost-effectively, we present the results of the new system along with options to keep supporting the team.
Results
achieved
- The purchasing department of the meat integrator understands the reasons for the fall in margins.
- The purchasing team adopts a new and highly competitive strategy, with consistent margin increases.
- The team has the necessary tools and assistance to proceed with a continuous improvement process, adapting with agility to changes in the market.
02.
Advice to a farmers’ cooperative to protect their prices.
Client
problem
A farmers’ cooperative from the northwest of Spain is going through its second year of poor wheat and barley harvests. They envision that prices for both grain types will be significantly influenced by the imports market this year, and they need to guarantee their selling prices somehow. They want to understand how their local market is related to the international one, and to have the necessary tools to be safe in determining the selling price of their grains. How can they protect their prices?
AESTIVUM
solution
- We analyze the situation of the cooperative, what the prices of grains are in their area, how they are affected by the import market, and the relationship of their prices with the futures markets.
- Together with the cooperative, we discuss the best way to manage the market risk for a seller of barley and wheat.
- We design a customized plan, explaining how their local market is connected with the international market for wheat and barley, as well as with the futures market.
- According to the plan, we show how to calculate prices and other basic concepts. We also explain how to operate in the futures and options market, to guarantee sale prices.
- We accompany the cooperative in their risk management and closely follow their progress so that eventually they can become autonomous and take full advantage of market opportunities.
Results
achieved
- The cooperative can deal with imports and optimize its sales.
- The cooperative is better able to quantify and manage its risks.
- The cooperative is capable of securing its prices and operates with confidence in international grain markets, having learned how they function.
We are happy to advise you in the agri-food markets!
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