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Ag News

CBH Group pays out $160 million through pool products

  • By: Farm Tender "Prime"
  • Dec 19, 2017

The CBH Group has paid out approximately $160 million to Western Australia growers from the current pool products season as it makes available historical performance data of the products for the first time.

The cash payment to participating growers comes from the finalisation of a number of pool products and the ongoing partial or progressive payment from products that have yet to close[1].

CBH Group Marketing and Trading General Manager Jason Craig said most of the finalised products delivered higher returns to growers compared to the average available cash price over the period.

“The strong performance of these pools was a function of varying factors, including favourable market and currency conditions, good risk management strategies and leveraging CBH’s export capabilities,” Mr Craig said.

“The outcome of this is that a number of our pool products delivered participants a market beating result.”

Pool products provide growers with another marketing option for their grain. It offers growers an opportunity to diversify their marketing portfolio by spreading their risk across products.

“Pools allow growers to reduce the volatility of their returns by spreading their risk to mitigate the impact of fluctuating market conditions,” Mr Craig said.

“Over time, our results show that our pool products have successfully delivered post-harvest outperformance to participants, meaning growers can use these products to diversify their risk without sacrificing returns”.

As part of a push to enable growers to make better informed marketing decisions, CBH has made available historical performance data of its suite of pool products.

Growers will be able to access the data in an easy-to-use format that shows how each of the pool products has performed since 2012-13.

Mr Craig said the information is illustrated through a chart that shows the movement of the cash price over the pool lifecycle, and overlaying the final pool return and the average cash price over a certain time.

“We’ve provided these charts to enable growers to make better informed decisions when it comes to marketing their grain,” Mr Craig said.

“They can view how each of the pool products have performed and determine whether CBH pool products could add value to their marketing portfolio.”

Mr Craig added that CBH will work on enhancing the pools information over time to ensure growers are armed with as much detail to help with their marketing decisions.