Be rewarded with a price premium on top of your grain contract in exchange for a firm offer to sell an additional equivalent quantity of grain to AWB in the future at a price you set.
Please check with your local AWB Territory Sales Manager about the availability of these products from 2019.
More Cash
on your initial delivery via an enhanced contract price.
Flexibility
to choose when and at what price level you leave your futures offer.
Opportunity
to enhance either the price of your grain contracted for delivery now or your forward contract price.
Why use AWB Premium Offer?
Premium Offer gives you a better price for your grain. It’s a contract that gives you a price premium on grain you are contracting today if you are happy to sell a further equal quantity of grain at a later date.
When you might use Premium Offer and how does it work?
Premium Offer can be used any time to enhance the price on either grain contracted for delivery now or on a forward contract. Premium Offer is designed to be used for a small percentage of your grain and not for your total crop.
You receive a price premium when you sell your first parcel of grain to AWB in return for providing an offer to sell an equivalent quantity of grain at a later date.
The second parcel of grain is offered at a date and at a futures price which you nominate. Whether or not you are required to deliver the second parcel of grain depends on, amongst other things, on whether the futures market price is higher or lower than the futures price you offered your second parcel. This is determined at the pricing date.
In simple terms, if it is higher, you will sell the second parcel to AWB at the offer price you nominated (plus Basis). If it is lower, you are not required to sell the parcel to AWB unless you have already fixed basis.
As your second parcel of grain is effectively unpriced you remain exposed to price movements until the pricing date you nominate, when AWB may or may not accept your offer on the second parcel.
No matter where the futures price goes you keep the premium on your first parcel.
For more information about this product, including benefits and risks and applicable charges, please read the Product Disclosure Statement (PDS), any updated PDS, the Financial Services Guide and any general and special terms and conditions that may apply before you decide to acquire the product. You can get a copy of the PDS from our website at www.awb.com.au or by calling 1800 659 944
Please also note that the information above does not take into account your objectives, financial situation or needs and as such it is important that you seek professional financial and tax advice in relation to your particular circumstances.
Example of how Premium Offer can work
Today’s cash price is $251 and you want to enhance this price with Premium Offer.
You offer a second parcel of grain to AWB with the following parameters;
- A pricing date of 27 September;
- A futures offer of $270/t; and you
- nominate a futures reference month
The premium is quoted at $15/t
The price on your first parcel of grain is increased to $266, which is equal to today’s cash price of $251/t plus the $15/t premium.
On the pricing date typically your offer on the second parcel of grain will either be:
Not accepted by AWB
If the futures settlement price is lower than your futures offer, and you haven’t fixed basis. AWB will reject your offer and you are free to sell your grain as you’d like.
Accepted by AWB
If the futures settlement price is at or higher than your futures offer of $270. AWB will accept your offer and you sell the second parcel of grain at a price equal to your futures offer of $270/t plus basis.
This example is hypothetical only and does not cover all scenarios on the second parcel or possible outcomes. Figures and amounts used are not representations of past, present or future performance or market conditions. You should not act on this information alone.
Paul Harris's Premium Offer Story
05 May. 2017
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Peter Glatz's Premium Offer Story
17 May. 2017
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How to apply?
For more information or details on how to apply for any of our PRICE+ Risk Management products please contact:
- Your local AWB Representative, or
- Call AWB PRICE+ Risk Management on 1800 659 944, or
- E-mail AWB at [email protected]
More information on Premium Offer - Download the Product Guide
Please see our
or
Pacer Ultra®, the AWB name and logo are registered trade-marks of Cargill Australia Limited ACN 004 684 173.
Basis PLUS™. Market Ultra™ and Premium Offer™ are a trade-mark of Cargill Australia Limited ACN 004 684 173. All rights reserved.
Basis PLUS™, Pacer Ultra®, Market Ultra™ and Premium Offer™ are issued by Cargill Australia Limited ABN 42 004 684 173, Corporate Authorised Representative 410006 of Cargill Australia Financial Services Pty Limited ABN 24 103 594 823, AFSL 393967 (trading as AWB, “AWB”). This document does not take into account your objectives, financial situation or needs. It is important for you to consider these matters and read the Product Disclosure Statement (PDS), any updated PDS, the Financial Services Guide and any general and special terms and conditions that may apply to Basis PLUS™, Pacer Ultra®, Market Ultra™ or Premium Offer™ before you decide to acquire the product. You can get a copy of the PDS by calling 1800 659 944.
No company in the AWB/Cargill group guarantees the performance of any product or returns. Figures and amounts used in this document are not representations of past, present or future performance or market conditions. Past performance is not a reliable indicator of future performance. No representation or warranty, either express or implied, is provided in relation to the completeness of this document and it is not, nor is it intended to be a complete statement or summary of the product.