Lavoro, the first agricultural inputs distributor in Latin America to have its shares listed on Nasdaq, launched a pioneering Barter operation for the Milho Certo 23/23 Campaign. Completed earlier this year, the action achieved about R＄550 million in new contracts. In all, R＄ 21.3 million will be distributed to farmers, with R＄ 1.8 million going to just one farmer from Chapadão do Sul, in Mato Grosso do Sul.
In total, 145 farmers from the states of Paraná, Goiás, São Paulo, Minas Gerais, Mato Grosso do Sul, Mato Grosso, Rondônia, and Tocantins, participated in the initiative. Given the “bearish” performance of corn during the period, and the assertive strategy of the Lavoro team in using the bearish tool, the campaign resulted in the amount of R＄21.3 million directed to customers in the form of discounts for the purchase of inputs for the next crop.
These results were achieved through the modality Troca Fácil, he Financial Barter operation offered exclusively by Lavoro, where farmers have guaranteed access to a package of state-of-the-art inputs, plus support for risk management in a simple and uncomplicated way. Marcos Oliveira, the company’s Commodities Operations Director, explains that this operation contemplates the purchase of a put (put option) at the Commodities and Futures Exchange in order to index the value of the client’s input purchase with the performance of the referred commodity. “That is, if the commodity presents a negative variation in the period, coming in below the level of the put offered, the client receives a discount at the moment of payment. In this case, the discounts given to customers as a benefit were between 25% and 40%,” he explains.
The main focus of these campaigns, often carried out by the company, is to guarantee the safety of the producer for his harvest. Within the Barter operations, especially with Troca Fácil, the producer makes the purchase and the company offers price insurance per bag. “That’s where the name comes from, because it’s a guaranteed exchange operation between the two parties. From the moment the deal is closed, the producer starts to follow the corn quotation in the commodities market, knowing that he will have flexibility to sell the grain at any time, with the guarantee of a better price”, highlights Oliveira.
If the price of grain is lower than what was offered in the insurance, the producer can pay his bill with the discount. Now, if the value goes up, he pays what was initially agreed upon. The transaction provides financial security in both bullish and bearish scenarios.
Barter for all
Although it is an apparently sophisticated transaction, Lavoro has made the commitment to simplify it for its customers and to bring it closer to the reality of the field. Lavoro offers the necessary support throughout the production cycle, from consulting for crop planning, providing complete packages with the best brands of inputs, crops follow-up and monitoring, to support for grains commercialization.
In addition, Lavoro has its own derivatives desk, with a dedicated team that monitors all commodity movements in the main world markets.
Lavoro is the largest distributor of agricultural inputs in Brazil and the first in Latin America to be listed on Nasdaq, the American stock exchange, under the tickers “LVRO” and “LVROW”. With a complete portfolio of products and services, the company empowers farmers to adopt innovative technologies and boost productivity. Founded in 2017, Lavoro has a wide geographic presence, operating in Brazil, Colombia and Uruguay, serving about 72,000 customers, through its physical presence, in its more than 210 stores distributed in Latin America and with a team of more than 1,000 technical sales consultants, and digital, with its marketplace. Learn more about Lavoro at: Link
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