This marketing year is far from being perfect for traders: the decrease of prices on global market and interruptions in logistics due to quarantine measures had a negative effect. Nonetheless Ukrainian agri-producers have hardly experienced negative changes, since the demand on domestic market and prices for grain crops remained stable. Andrii Ryzhenko, Head of department for agricultural products trading at ALFA Smart Agro told what to anticipate next season.
According to him, today all agricultural producers can be roughly divided into 2 groups: those who are ready to sell harvest to global markets right now and those who consider domestic market and will wait for a better price.
“According to the latest information from data analytics companies mostly good harvest is expected in the world, that is why competition on the global market will be high. We reckon that prices for grain will be lower than in the previous season, and prices for maize will probably be the lowest for the last 5 years”- says Andrii Ryzhenko.
He also told about those opportunities that trading department of ALFA Smart Agro can offer, so that agri-producers could get the best profit.
Forward contracts. This tool is getting more popular in Ukraine. In the first year when they were implemented, the company unloaded 10 thousand tons of products with forward contracts, this season the number increased to 50 thousand tons. The advantage of forward contracts is that they allow fixing price on a defined level and not to worry about its fluctuation on global markets. In case of cooperation with ALFA Smart Agro agro-producers get an additional opportunity to review the price in order to increase it once before the contract is closed. In this way if the price on the market goes up, agri-producers lose nothing. If the price drops, then the company covers these risks.
It is worth mentioning that in case a forward contract is confirmed by agrarian receipt, agri-producerscan count on a partial prepayment.
Concluding agreements in foreign currency. Price for grain on global market is greatly dependent on currency rate. ALFA Smart Agro offers agri-producers to document supply in export mode and get payment for harvest in foreign currency. This opportunity is available only in case of product delivery to Ukrainian ports. Clients are granted with comprehensive information support and accompaniment from the moment the contract is signed till its closure.
“All these tools have proved to be effective and profitable for agri-producers. For the season of 2019-2020 we sold 220 tons of harvest, which is twice as many as in the previous season. The growth is attributed to the increase of number of partner companies, since ALFA Smart Agro has a good reputation both among Ukrainian agri-producers and among foreign customers. This year we got offers from customers from Egypt, Turkey, Tunis, Morocco, Indonesia, etc. Therefore we have many options to choose from and can suggest the best price for Ukrainian agrarians”, – emphasized Andrii Ryzhenko.
We would like to remind that ALFA Smart Agro got the certificate of compliance with ISCC requirements, that is why it can supply rapeseed and maize as raw materials for biofuel production to European market. Soon it is planning to get certificate to supply maize to China, which will also allow offering premium prices for Ukrainian agricultural producers.
ALFA Smart Agro: https://alfasmartagro.com/
Department for agricultural products trading of ALFA Smart Agro: https://alfasmartagro.com/alfa-smart-trading/
