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São Paulo, May 11, 2022 – Lavoro, the largest distributor of agricultural inputs in Latin America, has been investing in offering Barter operations to farmers in different regions of the country. In April 2022, the company reached the mark of BRL 1 billion in contracts.
In addition to the traditional Barter, the company developed “Lavoro Valoriza”, a modality that guarantees special price conditions for farmers who work with soybean, one of the most relevant crops for Brazilian agribusiness. Financial tools and easy access to the derivatives market, such as stakes in upswing and downswing scenarios, in addition to the so-called “target” operation, where, if the commodity reaches a certain price level, the transaction is automatically “dismembered” and the gain is credited to the farmer, are also included in the portfolio.
“In a scenario of great uncertainty, with ongoing international conflicts and nearing presidential elections in Brazil, Barters are an opportunity to mitigate risks related to the volatility of commodity prices and exchange rates, for instance. Trading is carried out on the Brazilian B3 Stock Exchange, in Brazil, and in the Chicago and New York Stock Exchanges, in the United States, with the intermediation of a partner financial institution”, explains Marcos Oliveira, Head of Commodity Operations at Lavoro.
According to Oliveira, Barters can also be seen as an effective financial management tool. In this type of operation, farmers receive all the necessary agricultural inputs to render their production feasible, without the immediate disbursement of financial resources, already considering the expected results for the next harvest, which allows for a clear perspective of all the costs involved in the cultivation and expected harvest profits.
Although it is an apparently sophisticated transaction, Lavoro has endeavored to simplify it for its customers and to bring it closer to the reality of the field. The company offers any support needed throughout the production cycle, including the customer’s credit assessment, the selection of the required agricultural inputs for the preparation of the crop, the receipt and storage of grains, and product negotiations with the best margins.
Lavoro also has its own derivatives trading desk, with a dedicated team that monitors all commodity movements in the main world markets. “In addition to reducing costs at around 6% to 10%, hedging tools have helped our clients obtain surprising profit margins in their harvests”, emphasizes the executive.
“With Barters, we intend to become more than a distributor of agricultural inputs for farmers. We are advancing in the development of new products so that, in the near future, we may be known as providers of financial services that can help further leverage Brazilian agribusiness”, concludes Oliveira.
About Lavoro
Created by Pátria Investimentos – one of the largest alternative investment managers focused on Latin America – in 2017, Lavoro’s purpose is to positively transform the agricultural input distribution sector.
A positive transformation thanks to the SOLIDITY that Lavoro has in its DNA. Thanks to the widespread PRESENCE in strategic cities and regions for agriculture. Thanks to the standard of quality, CURRENTNESS and services that our employees seek to improve every day. And thanks to the TRUST that we insist on obtaining from farmers so that they can lead and solidify their growth, which is so essential for the world.
For more information, visit our official channels: website, LinkedIn, Facebook, Instagram and YouTube.
Press Information:
Hill + Knowlton Brasil
Gisele Gomes | + 55 11 99103-0946
Thiago Salles | +55 11 95602-8627