By Shiz Koizumi
Digitalization is a way of life in our current world. It’s no different in the risk management arena – you may have seen many firms moving recently to digitalize their customer interactions. In fact, Cargill Risk Management recently launched a new customer-facing website to provide quick access to portfolio and account information. The site is available for customers trading over-the-counter (OTC) energy products today, and will expand to serve customers across commodity classes in the coming months.
This type of automation can be convenient for routine tasks, but what you don’t want to lose along the way is the ability to pick up the phone and talk to someone who knows you and your business. Perhaps more importantly, you need a risk management team helping connect the dots in the external environment that may otherwise be hard for you to identify. Those risk management firms with a large set of touchpoints across an industry have a greater vantage point from which to view the market.
Cargill Risk Management benefits from the countless connections and diverse portfolio of Cargill within food, agriculture, shipping and industrials. Dairy is just one example of how we help connect the dots.
About five years ago, we spotted a growing need for Cargill’s large food customers in dairy risk management. Based on our numerous touchpoints with those companies, we could see that demand existed for a more sophisticated range of dairy risk products. Yet, there wasn’t adequate liquidity in the market for commodities like milk and cheese to get those solutions through an exchange.
That’s when we set out to pioneer something new. We knew that achieving the flexibility to meet customers’ hedging needs and risk tolerance on dairy products would require us to generate, in effect, additional liquidity by identifying counterparties with offsetting risk exposures. We were able to do this thanks to Cargill’s large number of connections with both producers and consumers of dairy. Cargill Risk Management’s role as an OTC provider was to offer liquidity when others could not. In essence, we could see and connect what others couldn’t, thanks to our breadth and scale.
This kind of thinking – powered by Cargill’s diverse risk portfolio – has helped us build off-exchange hedging strategies for our customers who need to source very large volumes of physical dairy products.
Moving Customers Forward
The commodities world never sits still. At Cargill Risk Management, we continuously look at information we receive from Cargill’s touchpoints across food, agriculture and related sectors to analyze and understand where there may be yet unspotted exposures or unmet needs. Our global presence means we are intimately connected to both producers and consumers across numerous commodities, giving us an unparalleled perspective. This is the kind of risk management partner you want.
Going forward Cargill will continue to augment risk management and customer service capabilities with digital tools. We are continuously streamlining the customer experience, providing online services for quick access to critical information. Behind the scenes, we will continue to analyze customers’ needs and revolutionize how we meet them.
Here’s the Cargill Risk Management difference: even as we digitalize, you can be sure there will still be a human being who knows you picking up the phone when you call!