Upload
others
View
3
Download
0
Embed Size (px)
Citation preview
Commodity Inventory Financing - An Australian Experience Ron Storey
NZX Australian Agribusiness
1 © Copyright NZX Ltd. 2014
Agenda
• Clear Grain Exchange – what it does, how it works
• How banks can hold title, fund the inventory, and
transfer ownership at client’s call
• Critical nature of warehouse and collateral
managers
7 August 2013 © Copyright NZX Ltd. 2013 2
Declaration -- NZX Limited
NZX in Australia NZX Stock Exchange
Clear Grain Exchange – What is it?
online exchange to transact physical grain anonymously (buy
direct from farmer without dealing with the farmer)
secure and automated settlement facility
All on standard GTA contract terms, quality & weight certs, etc
Site specific, firm bid/offer
Scalable platform for 000’s of growers to DIY trade execution
Has transacted over 2.5 million tonnes
Trade2Trade volumes growing
11 March 2014 © Copyright NZX Ltd. 2014 4
5 11 March 2014 © Copyright NZX Ltd. 2014
Clear Grain Exchange – Standard Settlement Facility
• Provides payment security to sellers to reduce counterparty risk
• Provides ownership (performance) security to buyers
• Custodian facility to eliminate CGX (NZX Limited) counterparty risk
• Title and funds exchanged to either party simultaneously
• Buyer pay within 5 Business Days – T+5
• Seller receives funds within 7 Business Days – T+7
• CGX has now transacted over AUD$750 Million of grain
6 11 March 2014 © Copyright NZX Ltd. 2014
1. Buyer places Bid, bid alert system notifies grower/seller
2. Grower/Seller Places Offer on Clear
Graincorp
Seller
Buyer
2. Offer
1. Bid
7 11 March 2014 © Copyright NZX Ltd. 2014
3. Bid and Offer matched, trade occurs instantly
4. Buyer and Seller notified via email
4. Trade notice sent
4. Trade notice sent
3.Trade
Graincorp
Seller
Buyer
2. Offer
1. Bid
8 11 March 2014 © Copyright NZX Ltd. 2014
5. Title to the grain is held in trust by Custodian
(Perpetual) on behalf of the seller
4. Trade notice sent
4. Trade notice sent
5. Perpetual
3.Trade
Graincorp
Seller
Buyer
2. Offer
1. Bid
9 11 March 2014 © Copyright NZX Ltd. 2014
6. Buyer pays into the Perpetual account T+5
4. Trade notice sent
4. Trade notice sent
6. Buyer Pays T+5
5. Perpetual
3.Trade
Graincorp
Seller
Buyer
2. Offer
1. Bid
10 11 March 2014 © Copyright NZX Ltd. 2014
Upon cleared funds being received….
7. Title to the grain is transferred to the buyer
8. Payment is made to the seller
4. Trade notice sent
4. Trade notice sent
8. Seller Receives Funds
7. Buyer Transferred Title 6. Buyer Pays T+5
5. Perpetual
3.Trade
Graincorp
Seller
Buyer
2. Offer
1. Bid
11 11 March 2014 © Copyright NZX Ltd. 2014
Clear Grain Exchange – Inventory Financed Facility
• Retains payment security to sellers
• Provides title (performance) security to banks and buyers
• Bank pays CGX in standard T + 5
• Bank holds title, issues buyer forward contract for x-days with interest
• At x-days buyer pays bank and receives title
• Seller still receives funds within T + 7
CGX’s new Inventory Financed Facility suits buyers who see 5-day
terms as a constraint, and frees up working capital
12 11 March 2014 © Copyright NZX Ltd. 2014
Bank
4. Trade notice sent
4. Trade notice sent
6. Bank Pays T+5
5. Perpetual
3.Trade
Graincorp
Seller
Buyer
2. Offer
1. Bid
6. Bank pays into the Perpetual account T+5
13 11 March 2014 © Copyright NZX Ltd. 2014
Bank
4. Trade notice sent
4. Trade notice sent
8. Seller Receives Funds
7. Bank Transferred Title 6. Bank Pays T+5
5. Perpetual
3.Trade
Graincorp
Seller
Buyer
2. Offer
1. Bid
Upon cleared funds being received, T+5….
7. Title to the grain is transferred to the bank
8. Payment is made to the seller
14 11 March 2014 © Copyright NZX Ltd. 2014
Bank
9. Bank transfers title
4. Trade notice sent
4. Trade notice sent
8. Seller Receives Funds
7. Bank Transferred Title 6. Bank Pays T+5
5. Perpetual
3.Trade
Graincorp
Seller
Buyer
2. Offer
1. Bid
9. At x-days, client pays bank ; Bank transfers
title to the buyer
CGX Value proposition
15 11 March 2014 © Copyright NZX Ltd. 2014
Value add to Grower customers
Value add to Trading customers
• Ability for growers to set their own offer price
• Ability to view and match firm bids
• Secure settlement facility reducing counterparty risk
• Variable cost accumulation tool (no fixed costs)
• Ability to view and match firm offers for quick accumulation
• Ability to transact anonymously with growers and other traders
• Inventory financing option via banks
Attracting grain into BHC customers
• CGX creates a ‘market at silo’ that increases transparency and
competition for grain
2014/15 Outlook?
- New Forward contract
- Expansion into South and West Australia
11 March 2014 © Copyright NZX Ltd. 2014 16
The Growth Story of Online Trading on the East Coast
CGX Trade Metrics H4 H5 H6 H5 to H6
SOS
Change
Oct to Feb
2012
Oct to Feb
2013
Oct to Feb
2014
Total No. of trades 3204 3493 3956 13%
Ave trade size 116 115 127 10%
Total Traded Volume 377,200 401,900 502,100 25%
No. of Grower sellers 1279 1183 1348 14%
No. of Trader Sellers 9 19 24 26%
Total Sellers 1288 1202 1372 14%
Total Buyers 38 49 54 10%
2013/14 BALANCE SHEET
Wht Bly Can Sor
CARRY-IN 3.5 0.5 0.2 -
PRODUCTION 26.4 9.3 3.7 1.3
TOTAL SUPPLY 29.9 9.8 3.9 1.3
DOM USAGE 6.9 3.1 0.8 0.9
EXPORTS 19.5 5.5 3.0 0.4
CARRY-OUT 3.5 WA
1.2 WA/SA
0.1 -
17
MESSAGE:
- Very tight east coast, buffer in WA/SA … so far … Black Sea?
- Watch east coast carefully for next 8 weeks??
- Contact ACF !!
“ “ Thank You
Discussion & Questions
11 March 2014 © Copyright NZX Ltd. 2014 18
www.cleargrain.com.au