AgroVista uses forward contracts for a half of produced grains — Fesyuk

Pavel Fesyuk
Pavel Fesyuk, Chief Commercial Officer of the AgroVista Group
Photo by: Latifundist.com

Every year, the AgroVista Group of companies sells half of the produced grain under forward contracts. This was informed by Pavel Fesyuk, Chief Commercial Officer of the Group in the exclusive comment for Latifundist.com.

The company has already sold 10 per cent of stocked corn but aims to bring this figure up to 50 per cent. Corn was traded at USD 152-172 per ton.

“Our strategy is based on the fact that there is always an unpredictable weather factor. There are 4 important cycles in the global marketing year: sowing in the southern and northern hemispheres, the period of corn grain filling and harvesting. In this sense, we see the point of dividing sales into 4 stages 25 per cent each. But this is not a constant, decisions are made based on market conditions, daily monitoring. In two months, corn filling will begin which is also an important factor,” Pavel Fesyuk explained.

According to him, such a strategy acknowledges that having neither railway transport nor river logistics makes it is extremely difficult for the company to participate in spot trading. It's partly why companies should use forward contracts.

“We traditionally do not take into account the sowing campaign in the Northern Hemisphere. However, this year it played a crucial role. Now everyone continues discussing the rate of corn sowing in the US, people have various expectations. The USDA report is much waited for. Although I believe that the market has already got used to the planting situation in the United States,” noted the CCO of AgroVista.

He also informed that AgroVista is in good relations with multinational companies-partners as it has the status of a golden supplier.

“This status allows us to form a joint position regarding price, conditions, quality and logistics. Unfortunately, every year there are less and less reliable companies,” concluded Pavel Fesyuk.

Previously reported that AgroVista Group of companies received long-term financing from Export Credit Agencies.

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