Volatility is back in the international commodities markets - and this volatility creates a host of opportunities and challenges for Rabobank and its clients. To show how this works, we take the international sugar market as an example. World sugar prices have been steadily increasing for the past year with a number of dramatic spikes in the summer of 2009 culminating in a 30-year high in November. Knowledge Of course, this creates a challenging environment for Rabobank clients, many of whom are involved directly or indirectly in the sugar trade. It also creates the perfect opportunity for Rabobank to demonstrate not only that it can help its clients through difficult times, but also help them to anticipate and respond to the opportunities such a volatile market creates, says Dagmar Bottenbruch, Head of Rabobank Germany and of Europe's Sugar and Food Ingredients Business. As in all F&A subsectors, Rabobank is looking for a leading position in the sugar sector, she says. "We already act as the bank for the leading players worldwide in this industry. It helpsthat we have a huge amount of knowledge in-house, including some of the world's leading sugar experts, who cover every aspect of the sector. Plus we have offices in most countries in which sugar is important, in Europe, the Armericas and in Asia. And we have the right products," she says. For instance, says Nick Hungate, a London based commodities trader at Rabobank International, there has been a big rise in sugar producers' use of long-term hedging products, something they can only really do via the likes of Rabobank. "Our Australian producers have been very active hedgers.The futures market only gives them access to hedging, say, 12 months out, while we're providing them over-the-counter hedging products that cover the next five or six years. This guarantees them prices significantly higher than their cost of production for much longer periods and effectively makes these businesses viable on a long-term basis." One of Rabobank's biggest advantages in such a volatile market is information, Bottenbruch says. "We have the very best resources, so we know what's going on in the sugar market. Andy Dufif, Manager of Food Agribusiness Research and' Advisory (FAR) of RI's Sao Paulo office, was recently in Germany to talk to our ISSUE 22 JANUARY 2010 THE WORD 17

Rabobank Bronnenarchief

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