SFGCU renewing program of forward contracts

SFGCU renewing program of forward contracts

Ukrinform
JSC State Food and Grain Corporation of Ukraine is launching an autumn program of cereal purchase from the 2022 harvest, including as regards 3rd class wheat and barley grain, with the minimum batch to be delivered set at 100 tonnes.

That’s according to the company press service, Ukrinform reports citing the relevant Facebook post.

"The decision to enter into a contract for the supply of future harvests’ grain is made quickly and remotely. Prepayments under contracts are made in cash exclusively, which allows our customers - agricultural producers - to buy the goods they require to effectively run their own business with the chosen suppliers," the corporation noted.

SFGCU is obliged to assess the financial performance of the potential supplier, as well as its sown areas, before approving a decision to strike a deal.

Read also: Ukraine may harvest more than 100M tonnes of grain in 2021 - Leshchenko

The corporation noted that among mandatory conditions for signing a forward contract are insurance of future crops, which is being pledged, and the filing of a Commodity Agricultural Receipt (or pledge agreement by the decision of the State Property Fund) in order to mitigate the risks associated with improper performance.

"After all the required contracts are signed and documents provided, the advance payment shall be UAH 2,800 excluding VAT per tonne of contracted grain. The rate for the use of funds stands from 9.5% to 13% per annum in UAH, depending on delivery volumes. As part of a loyalty program, regular customers can get an additional 0.5% discount to the base rate. The final calculation shall be made at market prices after the grain is delivered," the company said.

Read also: Ukraine’s grain exports reach almost 17.8M tonnes

The State Food and Grain Corporation of Ukraine operates the most extensive network of branches in Ukraine, represented in 23 regions, boasting a silo capacity of 3.75 million tonnes.

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