Juan Pedro Gazzotti, business director (CBO) of Nera, the digital ecosystem of payments and financing for agriculture, advances his vision of the next campaign and outlines the most convenient tools for financing.
The next agricultural campaign appears to be at least challenging for agricultural producers. Due to multiple factors ranging from not so favorable climate forecasts, to an inconvenient exchange rate, to the high tax burden.the field is preparing for the next planting of soybeans and corn, two key crops for the field’s foreign exchange income.
In this context, access to credit and the financial tools available to finance oneself play a fundamental role in a framework of depressed international prices.
“Without a doubt this year the rules of the game changed and the producer is delaying investment decisions regarding the next campaign.”. 80% of production is carried out on rented land and the leases were carried out normally; but everything related to the purchase of agrochemicals, seeds, etc., takes longer. At this time of year, traditionally 90% of the campaign was already defined, that is, the producer already knew what crop he was going to plant, how much and what he was going to apply, but this year we are at around 50%. In this scheme, the possibility arises of taking forward credits with a fixed price waiting for a recomposition at the time of harvest,” he explained in dialogue with Ámbito. Juan Pedro Gazzotti, Business Director of Nera, the digital payments and financing ecosystem for agriculture, which connects producers and suppliers with financial entities and virtual wallets.
Previously, to close a forward contract, producers had to contact a broker, exporter or an agricultural input firm, now with new financial tools the process becomes more agile and also allows you to choose between various rates and types of financing, both in pesos and dollars.
“We want producers to have the greatest flexibility to build the grain business tailored to what they need. To do this, we develop commercial alliances with more than 25 leading market operators and design a product that allows them to choose the destination of the funds (whether for payment to suppliers or working capital), select the broker or exporter and the delivery port. you want, as well as the ease of determining the price with the incorporation of the modality to be set,” said Gazzotti.
A key fact is that during the last six months more than 200 thousand tons of grains were used as collateral to finance in Nera and 85% of that volume has been carried out under the modality to be fixed.
Another important issue is that this year credit in dollars was once again present in the banks’ portfolios and in this framework, Nera emphasizes that in this case it is convenient to evaluate – when setting the price – the comparison between rates in dollars or commodity price changes. There are times when grains yield repo rates higher than financing rates and selling grains in deferred positions automatically generates a positive impact.
For its part, In pesos, the rates in this currency must be evaluated versus the devaluation rates expected by the market. This is very important given that the income resulting from the sale of grains is dollarized, so this analysis can generate very interesting opportunities.
Regarding his projections regarding the next soybean and corn campaign, Nera’s business director explains: “We are facing a difficult year from a climatic point of view.which tends to be drier than with excess moisture, which is why I think The producer takes a rather defensive strategy and will try to make the lowest possible investment because he knows that if he applies more inputs he will not be able to obtain high yields per hectare.. On the other hand, more than the exchange rate and the monetary policy set by the GovernmentWhat hits the producer the most today is that 62% of their income is being taken by the State between national and municipal taxes. and there does not seem to be any signs that this is going to go in another direction at the moment.”
silo field.png
What’s coming
Regarding Nera’s expansion plans in the medium term, Gazzotti announced that they hope to add more financial entities to their ecosystem so that producers can opt for different types of financing or payment methods in an agile and transparent way.
On the other hand, the company plans its landing in Paraguay with the same business model, while it is working on the development of tools linked to artificial intelligence to provide key information to both producers and agricultural input companies.
Source: Ambito
I am an author and journalist who has worked in the entertainment industry for over a decade. I currently work as a news editor at a major news website, and my focus is on covering the latest trends in entertainment. I also write occasional pieces for other outlets, and have authored two books about the entertainment industry.
