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
