BP Bunge Bioenergia, through Allia, a program aimed at encouraging and strengthening partnerships with sugarcane suppliers, and Coopercitrus – Cooperative of Rural Producers, enabled the first complete barter operation based on fixing TRS (total recoverable sugars) future prices of sugarcane in the world.
A well-known operation in other commodities, barter provides for the financing of inputs, pesticides, fertilizers, and services for the crop, using part of the production as a bargaining chip to pay expenses.
In the operation made possible by BP Bunge and Coopercitrus, the benefited producer company, Avance Agropecuária, from Itumbiara (GO), will have its input costs, financial fees, and the final price of TRS produced guaranteed, based on early and intermediated negotiation by BP Bunge with reference to the values of Consecana – Council of Sugarcane, Sugar and Ethanol Producers of the State of Sao Paulo.
“I saw an opportunity amidst so many uncertainties” explains Nycollas Cestari, owner of Avance Agropecuária, about the unprecedented barter initiative in the sugar-energy sector. “Coopercitrus promoted the sales and the opportunity to receive kilograms of sugar, while BP Bunge negotiates and locks the price of my sugar that I closed with the cooperative” details the businessman.
The expectation is that the initiative will be strengthened after this first experience. “We are certain that our allies, the sugarcane producers, will realize that this is an innovative alternative to reinforce the long-term sustainability of their companies. Before, the producers feared to fix the future price of their product without knowing how much the variation of their main costs would be. With the model we enable, costs and revenues are fixed. There is margin security and predictability, which is essential for the business”, says Adriano Dalbem, Origination and Supplies director at BP Bunge Bioenergia.
The operation offers a series of advantages to Coopercitrus cooperative sugarcane producer and member of the Allia program, such as risk mitigation and a differentiated credit profile in the market, as it offers unique limits, financial rates, and trade conditions. “Barter with TRS fixation is an innovation in the sugar-energy industry. Exchanging the necessary inputs for the production of sugarcane and high-tech services for sugar from the future sugarcane harvest allows the producer to take part in the future market benefits. We believe that this is the first step towards a transformation in the way we do business in the industry”, explains Fernando Degobbi, CEO of Coopercitrus.
The partnership between Coopercitrus and BP Bunge is also focused on the technical development of sugarcane producers, as well as the strengthening of sustainability principles throughout the production chain. Coopercitrus makes available the entire platform of technologies, services, and its technical team to support producers participating in the program in their search for greater productivity and quality, ensuring the best agronomic, environmental, social, and management practices.
Coopercitrus – Cooperative of Rural Producers, headquartered in Bebedouro (SP), is the largest cooperative in São Paulo and one of the largest in Brazil in supplying inputs, machinery, implements and technical support. With more than 37 thousand members and business units in more than 60 cities, in the states of Sao Paulo, Goias, and Minas Gerais, Coopercitrus aims to offer integrated solutions so that its members can grow as a whole.