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Advanced Price Risk Management

Place: belgium, Europe
Socio-economic dynamics and global markets Socio-economic dynamics and global markets
Total Budget: € 500.000,00 | Period: From April 2014 To

Summary

With increasing volatility and uncertainty, risk management is no longer a luxury but rather a necessity. AroundCommodities (‘AC’) provides a wide range of integrated tools to understand and manage price risk, develop hedging strategies & become a market analyst.
AroundCommodities.com is the first online interactive platform, structured around specific content. We have developed a novel way of online learning & information structuring. Given the large rate of data and information creation, there is an ultimate need of making information and knowledge easily accessible, eliminating various thresholds.
Around Commodities offers you: Innovative e-learning content, Latest News and Views, Accurate Data, Robust Tools and finally, the Ultimate Social Community Experience backed by a Market place for physical trade.

Partnership

GrowAbric - Belgium

Lead applicant

VWD Group - Belgium

Initiative partner

UGent - Ghent University - Belgium

Initiative partner

With increasing volatility and uncertainty, risk management is no longer a luxury but rather a necessity.

AC is the first tool developed to remove the existing barriers and grant access to knowledge and information to all the players in the market. The integrated approach creates a synergy where each user will gain market power in their respective field, and thus improve efficiency and fairness of the market and the economy. The platform is intended to strengthen the position of the most vulnerable players and offer a cutting edge solution truly accessible to all. In other words, small firms and individuals will be able to reach the level of knowledge and information access now mainly accessible to large multinational companies. 

The synergy between different sections provides the user access to birds-view insights for their markets, and increases market transparency. In a nutshell, the user will be able to manage every aspect of risk management – from education to placing orders in futures markets with unprecedented ease. 
 

AroundCommodities offers Innovative e-learning content, Latest News and Views, Accurate Data, Robust Tools and finally, the Ultimate Social Community Experience backed by a Market place for physical trade.

The direct relevance for this innovative product for Flanders is two-fold: 
• Changes to the Common Agricultural Policy (CAP) 2015 are removing the last protective measures for the producers in agro-food industry. This combined with increased volatility on the international markets leaves the Flemish agro-food complex very vulnerable for price risks.
• The Flemish agro-food industry has outputs of superior quality – i.e. the production side is optimized to the best standards. However, on the price side of things such as international trading and negotiating (market power) a lot of improvement is possible.

Moving beyond Flemish borders, the innovation of AC provides a superior product to the international markets. Since globalization connected all the markets and their prices, price risk management and trading becomes an international challenge – and thus an opportunity for AC.
 

The AroundCommodities user had to deal with many thresholds before (s)he's able to manage her price risk with futures, and time consuming info-processing to manage it. AC offers an all-around solution for price risk management; market understanding; follow up; physical trading; networking. In a nutshell, the customer will be able to gain full understanding of price risk management and more importantly manage it, while maintaining strong ties with his/her peers.

(Agricultural) commodities producers & Processers of (primary) commodities; Universities, Business Schools, Knowledge centra; Banks (Private banking & Asset management), Brokerages, Investment funds; Exchanges - The main platform allows the customer to gain skills in price risk management.

Dr. ir.  Valéri Natanelov
Project Lead
PhD (UGent) in Commodities Futures Markets - expert in price risk management International network (US, India, Russia, Europe & Middle East). Extensive international network in the commodity markets – ranging from education to physical and derivatives trade.

Adeel Cheema
IT-Lead
Senior PHP/CMS Developer with Award winning skills in PhP. Expert in web development with extensive experience. Skills at planning, building, testing, implementing, configuring, documenting, and troubleshooting of software development projects including collaboration with the initiator.

João Barroso
Business Development Manager
With an Engineering Masters, experience and interest in diverse fields, Joao likes to ask questions and think out-of-the box in order to find sustainable solutions that enable lasting financial health to business and customers.

Aleksandr Natanelov
CFO ...  
 

 

The main difficulty was developing a completely novel way of e-learning, tailored for full-time workging people. Here the intention was to develop and structure the course material, reducing all the thresholds - i.e. no memorisation (use of tooltips), story line described by structure, visuals recapitulating the core concepts.
See attached images for specific examples. 

Integrated images example of an integrated image
Start of course Illustration of how the storyline is told by the structure of the course-content
example2 of integrated image Illustrating alternative price risk strategies

Price risk management can be considered as a good example of waste reduction. To exemplify, current sanctions and export prohibitions of agricultural products to Russia have caused a great deal of waste of agricultural products. However, when farmers invest in price risk management such tragedies can be easily avoided. 

Since our initiative only has been launched for several months, it is difficult to make any statements about long lasting results. 

Our success stems from our ability to offer accessible & accurate data and information to our users complemented by knowledge and thus providing a convenient, trustworthy way to become educated, informed and proactive about price risk in commodity markets.  

Our innovative platform complemented by social medial channels serves as the main dissimination tool for reaching our audiences.