NAB offers soft commodity hedging in Australia
National Australia Bank (NAB) has launched a range of soft commodity hedging products to cater for the country's large agricultural sector.
Called Agribusiness Price Risk Management Solutions, the new service will allow producers, merchants and processors to hedge wheat, cotton, canola, corn (sorghum), sugar or wool commodities up to three years in advance, depending on the commodity.The product range includes swaps, floors, caps, collars and participating forwards, traded over-the-counter (OTC) and cash-settled. The hedging tools will be offered in certain foreign currencies, such as US dollars as well as in Australian dollars to eliminate the need to establish a foreign exchange hedge as well.
NAB has also secured an exemption from the Australian government to offer the OTC hedges to smaller operators. Until now, OTC transactions were limited to larger agricultural enterprises and corporate clients, according to Mike Carroll, general manager of Agribusiness based in Melbourne. “Previously, restrictions applied to the use of OTC hedging products by customers with gross assets under $5.674 million. That limited the use of risk management products to larger agricultural enterprises and corporate clients,” he said.
In turn, the bank will now offer the range of products to customers with at least $567,400 in net assets and $170,220 turnover. But Carroll added that customers have to obtain advice from a licensed futures adviser as an independent check so that they fully understand the hedging strategy.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Markets
Dealers bullish on upcoming offshore CGB futures relaunch
Better contracts and deeper foreign interest in China bonds set to spur uptake, but launch date unclear
Regulatory crackdown puts Korea autocalls in deep freeze
Mis-selling fears see distributors pull back, leading to 40% issuance fall in a month
Invesco more than triples size of its FX options book
Counterparty Radar: Manager’s portfolio exceeded $5bn notional in Q4
Volatility shape-shifters: arbitrage-free shaping of implied volatility surfaces
Manipulating implied volatility surfaces using optimal transport theory has several applications
BGC forming consortium to take on CME Group’s rates empire
Banks and PTFs are being offered a stake in FMX, which has CFTC approval to launch a futures exchange
RMB vol returns as hedge funds take barrier trade profits
Unwinds of exotic positions saw vol jump 72% after surprise PBoC move last week
‘Fear gauge’ within expectations, some say
Several options specialists dismiss claims that structured products are distorting the Vix
Brazil readies long-dated FX hedging scheme for green projects
Development bank IDB will lend its credit rating to unlock cheaper USD/BRL hedges out to 25 years
Most read
- Top 10 operational risks for 2024
- Regulators’ FRTB estimates based on faulty premise – industry study
- Top 10 op risks: AI fears drive cyber risk to record high