In the world of commodity trade, one unique challenge that often arises is the shipment of undetermined quantities. When dealing with bulk shipments, it becomes impossible to load an exact amount of a commodity due to various factors such as product quality and shipment conditions, with moisture being a critical element. Traditional ERP systems struggle to handle such fluid contracts as they typically require precise quantities. However, Agiblocks CTRM (Commodity Trading and Risk Management) software provides a comprehensive solution to manage these complexities efficiently. In this article, we will explore how Agiblocks CTRM enables seamless management of tolerances and franchises in commodity trade contracts, making it easier to handle fluctuating quantities and associated price risks.
Understanding Fluid Contracts and Trading Rules
In commodity trade, it is common to encounter trading rules that govern the shipment of commodities with tolerances. These rules define the limits within which loading quantities can vary from the agreed contracted quantity. For instance, the GAFTA rules for grains or FCC rules for cocoa specify such tolerances. By allowing flexibility in the loading quantities, these rules account for factors like moisture reduction during shipment. In addition to tolerances, franchises may also come into play, further adding to the complexity. Agricultural and soft commodity industries commonly employ these practices, necessitating the need for a CTRM system that can effectively handle such intricacies.
Agiblocks CTRM Solution
Managing fluid contracts and tolerances in commodity trade is a complex task that demands specialized software. Agiblocks CTRM offers a comprehensive solution to handle these intricacies efficiently. With its robust functionality, including tolerance management, franchise handling, streamlined operations, and price risk management, Agiblocks empowers commodity traders to navigate the challenges of fluctuating quantities and associated price risks with confidence. By leveraging Agiblocks CTRM, businesses can enhance their operational efficiency, reduce errors, and gain a competitive edge in the dynamic world of commodity trading.