1. No category

The difficult challenge: How to balance between
getting the best salmon price and security?
Observations, methods and tools used in
the agriculture markets
ODA IN FRANCE AND EUROPE
AMR HOLDING
AMR RESEARCH DEPARTMENT
Fundamental research
Weather models
Price models
Weekly recommendations + Alerts
100 employees - 3000 clients – 10,000,000 mt of grains
ODA
(Analysis, informations, recommendations)
20/04/2015
ODA FUTURES
(Futures brokerage)
ODA Group – Managing commodity price volatility
AGRICOTE
(Physical brokerage)
2
Get the balance between price en security
Security
You’ve solid
margins 
Stop
dreaming!
Performance
Ready to die?
20/04/2015
Here we are!
ODA Group – Managing commodity price volatility
3
How to improve your security/performance ratio?
Security
1
2
Performance
Plan
I.
Price risk in your business
II. Price risk management – Margins hedging
III. Decision process to secure and improve your
business margin
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Managing commodity price volatility
 A major stake for agro-businesses since ever … but rather
recent on European ag-markets
 Our mission: protect margins & revenus against market
volatility through innovative risk management
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Salmon price volatility ($/kg)…
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… VERSUS WHEAT PRICE VOLATILITY
300
280
Prix
blé price
mondial
US wheat
260
Prix
blé price
UE
UE wheat
Prix en €/T
240
220
200
180
160
140
120
100
80
copyright@ODA
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Market analysis matters, but…
 Market analysis: understanding offer, demand, balance
between the two, weather follow-up…
 Analysing short-term tendencies through charts
 Using modelization to anticipate
 At the end, can we predict tomorrow’s proteine & vegetal
production conditions?
 Market analysis based decision making can lead to risk
taking
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… framework is the most important
ODA’s framework integrate market analysis,
but first of all it’s a process in depth
1. Buying & selling conditions check up, timing
2. Margin check up
3. Objectives & means (cash, tools, rules)
4. Ratio & level fixing
5. Personal strategy design
6. Backtesting & stress testing
7. Reporting system
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ODA risk matrix
No sales price change
A
Value chain
B
B
Value chain
Medium
risk(3)
High
risk(5)
High margin
Low margin
Low
risk(1)
Medium
risk (3)
A
Price change
Low(1)
Quite
low (2)
Medium
(3)
Quite
high (3)
High (4)
13/06/2014
13/05/2014
13/04/2014
13/03/2014
13/02/2014
13/01/2014
13/12/2013
13/11/2013
13/10/2013
13/09/2013
13/08/2013
13/07/2013
13/06/2013
13/05/2013
13/04/2013
13/03/2013
13/02/2013
13/01/2013
13/12/2012
13/11/2012
13/10/2012
13/09/2012
13/08/2012
13/07/2012
13/06/2012
13/05/2012
13/04/2012
220
13/03/2012
Applying decision with supplier or futures market?
 If supplier price is too high
 If no buying agreement with supplier
Euronext wheat price and hedging for food industry
230
Buying price
210
200
Prix Blé Nov14
190
180
170
Example of result Agro-food A : WHEAT FLOUR 2013
Achats décembre12-mars
13 2012 à 262 €/T
+ 100% PUT
Moyenne marché blé C1
Achats aout-décembre 2012
à 205€/T
Exercice PUT
Achats janvier-aout 2012 à
180€/T
Average wheat price (Euronext): 240€/T
Client buying price (Euronext ref.): 205€/T
If 10 000T: 350 000€ earning in procurement budget, 15% of yearly result
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Example of result Agro-food A: WHEAT FLOUR 2014
Achats mars-mai 2013 à
230 €/T
+ 50 % PUT
Exercice PUT + Achats juinAout 13 2013 à 215 €/T
Achats Aout-février 14
2013 à 180 €/T
+ 35 % PUT
Achats février 14- février
15 à 190 €/T
Average wheat price (Euronext): 218€/T
Client buying price (Euronext ref.): 215€/T
=> Less performance but all way protected against a new price rise
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Your contacts
Stefan Nether
Directeur grands comptes / International Business Development
GSM : +33 (0)607 518 916
[email protected]
Bruno Ben said
Expert IAA / Industry Expert
GSM : +33 (0)778 820 732
[email protected]
Emeline Bergeron
Expert IAA / Industry Expert
GSM : +33 (0) 610 547 710
[email protected]
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