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22/11/2017 0:00 - Agricultural Commodities Market
BCR and ROFEX working on dairy products financial instruments

According to the OECD-FAO Agricultural Outlook for the next 10 years, the global production of fluid milk would experience a record increase of 178 Mt, or 22%, compared to the 2014-2016 base period. Developing countries would be showing the highest annual growth rates, particularly India and Pakistan. In fact, India will be the largest global producer by 2020. In the case of Argentina, it will remain as an important exporter of milk powder. Meanwhile, Bolsa de Comercio de Rosario and Rofex are working on developing financial instruments to accompany the growth of the sector.

Part of the article is related to the dairy sector according to the OECD-FAO Agricultural Outlook 2017-2026. Since it is a summary of the original edition, it is not translated. Therefore, we encourage reading the full work here.

Bolsa de Comercio de Rosario and dairy sales contracts

Argentina occupies a relevant role in the dairy business. According to data from the Observatory of the Argentina Milk Value Chain, exports of whole milk powder (WMP) reached 110,000 tons in 2016, positioning the country as the fourth largest exporter, behind Uruguay, which occupies the third place. In the first eight months of 2017, Argentina exported about 36,000 tons of WMP, 27,200 tons of cheeses next to 12,000 tons of skim milk powder (SMP), according to data from SENASA.

Bolsa de Comercio de Rosario (BCR), as a promoter of the development of markets, has been working in various projects for several years aimed at providing services to the Argentine dairy market, working with institutions and stakeholders of the sector.

One of the main objectives is the creation of a milk supply-purchase contract that would make it possible to move towards a progressive institutionalization of the dairy market. Among the advantages of this instrument is the possibility of improving access to financing, as it is evidenced from a recent proposal by Banco Nación (autarchy bank of the National Government) consisting of a new line of credit for dairy producers. For the first time in the history of Argentine dairy financing, the Bank’s circular referring to this line of credit includes the possibility of concluding contracts for the sale of milk and the possibility of ceding the flow of future funds of such commercial operation. On the other hand, there is another initiative of the Government of the Province of Santa Fe and local dairy producers to organize a milk brokerage house that would use these contracts for the sale of registered milk in the BCR, which would in turn provide arbitration services.

Amongst the services that Bolsa de Comercio de Rosario has developed for dairy producers we can find:

· Proposed contract model for the sale of raw cow milk with registration at Bolsa de Comercio de Rosario.

· Arbitration services for conflicts arising from registered contracts.

· The entity offers to work alongside milk producers and processors in the development of financing tools based on milk purchase agreements.

· Development of milk futures contracts working alongside ROFEX and MATBA.

ROFEX and MATBA have worked with the Milk Industry Under secretariat of the Ministry of Agroindustry on the development of milk futures. As a result, a proposal for a milk futures contract based on an index of average prices paid to producers according to purchase statements required by the Ministry of Agroindustry.


 Institutional video

Institutional Video of the Bolsa de Comercio of Rosario (Rosario Board of Trade)

 Rosario Board of Trade

The Rosario Board of Trade is a centennial institution located in Rosario, in the most important agroindustrial zone of Argentina. Throughout its history it has created and boosted transparent, solid and reliable markets: the Grains Physical Market, the Futures Market, the Capital Market, and the Livestock Market.

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Bolsa de Comercio de Rosario Córdoba 1402 - S2000AWV
TE: (54 341) 5258300 / 4102600
Rosario - Santa Fe - Argentina

Oficina Buenos Aires Reconquista 458 piso 7° - C1003ABJ - Cdad. de Buenos Aires.
Tel: (54 - 011) 43280390/1484 43939391/9649- Fax: (54 - 011) 43939649