Listed Brazilian grain grower Terra Santa Agro has stepped up use of complex derivatives to defend positions and potentially profit from commodity price volatility amid a global trade war, Chief Executive Officer José Teodoro Junior says.
Terra Santa is using “collar options” and “accumulator” contracts whereas last year the use of soy and cotton futures was a more prevalent form of hedging, Teodoro told Reuters.
This way, the company can avert the risk of “a mismatch” related to futures prices and the so-called basis premium risk, he says.
According to a report the report at Reuters, one of the largest grain growers in Brazil with annual sales of about $192 million, Terra Santa has sold more than 50% of new-crop soybeans through complex derivatives.
