Grain growers seeking to seize early grain pricing opportunities now have a new range of tools at their fingertips, with the launch of a suite of price risk management products by AWB RiskAssist.
The products will provide growers an unprecedented spread of grain price risk management options, ranging from simple products with low tonnages, to more advanced alternatives which allow growers more flexibility in managing their grain returns.
“These price risk management tools are about providing growers with more control over their pricing, enabling them to better manage washout exposures and providing them more flexibility to deal with changing market conditions,” AWB Managing Director Andrew Lindberg said.
“What AWB now offers growers is a full complement of grain finance and price risk management products, starting with the AWB National Pool and Harvest Finance, through to the forward pricing options such as Multi-V cash contracts, and now the improved range of more detailed price risk management products through RiskAssist,” Mr Lindberg said.
“Nowhere else can growers get access to this range of services and the expertise to support them,” Mr Lindberg said.
Mr Lindberg said more growers are using risk management products as part of their farming business.
“In March we saw wheat futures spike and a weakening exchange rate between the US and Australian dollar. In this environment growers have shown an increasing appetite for price risk management, and a large number of AWB RiskAssist’s clients have taken advantage of these market movements.
“Now, with this new range of products growers have the tools to seize these pricing opportunities and generate what they consider an appropriate return,” Mr Lindberg said.
AWB RiskAssist’s offering now includes:
- AWB Flexi-3 – a simple entry level product for use on wheat, canola and sorghum. It provides growers the ability to lock in each component of their grain price to produce an Australian dollar return. Basis is derived from the relevant cash price.
- AWB Fixed Basis – provides increased flexibility for growers, including the use of price floors with potential upside and the ability to reset futures and foreign exchange positions. Basis is derived from the relevant cash price.
- AWB Basis Pool Plus – offers the ability for growers to set a more certain Pool return, with control over futures and foreign exchange components, while basis is derived from the AWB National Pool. Includes the ability to use price floors with potential price upside, and reset futures and foreign exchange positions.
- AWB SWAP Plus (AWB Hedge Account) – growers can generate a simple Australian dollar price for their grain, excluding basis, with non-deliverable contract terms. Provides the ability to deliver to an AWB grain contract later to assist with management of the basis.
- AWB Exchange (AWB Hedge Account) – more advanced and active pricing control for grain with non-deliverable contract terms, and the ability to deliver to an AWB grain contract at a later stage to assist with management of basis.
“This range of AWB’s products allows those growers who wish to dip their toe in the water to do so with entry level low minimum tonnage contracts. At the other end of the scale, there are more sophisticated alternatives designed for those who are seeking to take a more active role in their risk management, with a high level of flexibility regarding futures and currency positions,” Mr Lindberg said.
These products are issued by AWB RiskAssist Limited (AFSL No 244 128), and to use these products, growers need to be registered with AWB RiskAssist. They can do this for free and with no obligation by contacting their local AWB Grain Marketer. Before deciding to acquire or continue to hold any of these products growers should refer to the Product Disclosure Statements available on the AWB website, or through their local office.