Growers, originators, and producers have started adopting CTRM systems to gain the real-time business intelligence necessary to make better, smarter decisions around trade execution, position management, and physical logistics. Here is a checklist of the key functionalities that agriculture businesses should look for when considering CTRM solutions.
Trading: A CTRM solution should provide complete control over trading operations and enable traders to better manage current positions. It should integrate physical and financial trading, improve trading efficiencies, provide sensitivity analysis, and enable “what if” scenarios.
Price risk management: Sophisticated analytical tools will allow portfolio stress testing and enable you to analyze real-time position and exposure for optimized price risk management.
Chartering and vessel operations: A CTRM system should allow you to manage all chartering, post-fixture activities (including freight risk management), and financial aspects of commercial vessel operations in a single system.
Scheduling: A CTRM system should manage the logistical complexities and streamline the supply chain operations required to transport bulk commodities. It should handle all transactions from straightforward physical trade matching to complex itinerary scheduling.
Counterparty credit risk management: A CTRM solution should address the entire credit risk process and provide a full range of credit analysis and operational tools in all key areas.
Hedge accounting: A key component of any CTRM solution is the ability to manage the daunting set of requirements under hedge accounting regulations.
Fair value disclosure: The system must provide the tools and framework to define, measure, and manage fair value levels and meet all disclosure requirements for compliance.