Helping your money grow: FX in the agriculture sector
Britain’s agriculture sector is one of the most important to the wider economy, providing the country with robust food security and a thriving export sector. While these exports have been affected by Brexit, new trade deals are being struck with agriculture at their centre, providing new opportunities for the sector.
As part of a truly global industry, British agriculture businesses have diverse FX needs. On the purchase side, this can include large one-off or repeat purchases from abroad, such as machinery and resources like fertilisers respectively. Furthermore, British produce is sought after around the world, and thus British agricultural businesses may wish or need to receive payments in foreign currencies.
While it is a good thing that there is great demand for these products from abroad, the foreign exchange aspect can add a needless complication to the already complex operation and logistics demands of growing and then supplying produce around the world, not to mention the potential loss of revenue from bank charges or if the exchange rates are unfavourable. Thankfully, Currency UK offers a range of mechanisms that can assist UK agribusiness with these issues, ensuring that they can make the most of their money when buying and selling goods.
For making large one-off purchases, Currency UK offers exclusive exchange rates more advantageous than those received when using a bank and will incur far fewer costs when making the exchange.
Agribusinesses often receive orders with long lead times, receiving orders for items before they’ve grown in order to minimise the time between the produce being in a field and being on a plate. These lead times of months give a lot of time for exchange rates to fluctuate, which introduces a huge element of uncertainty when managing finances and potentially reducing the money eventually received.
This is where forward contracts can become useful. If a business knows how much money it is due to receive in a foreign currency, you can create a forward contract, which allows you to guarantee an exchange rate for a date in the future on which an exchange will be made. This provides both certainty when recording and managing finances and can be advantageous if the rate has moved against the business in the meantime. There are also flexible forward contracts
All of these can be managed via our easy-to-use online FX platform, which allows users to manage their reserves in various currencies, make exchanges and manage their hedges, including forward contracts and flexible forward contracts. It also keeps comprehensive and up-to-date records of your transactions, making for easy management and reporting.
Furthermore, users will have a dedicated Account Manager that can advise them on the best FX solution for their specific needs, whether that be a one-off exchange or a regular, recurring payment.
Find out more by speaking to one of our Account Managers by calling +44 (0) 20 7738 0777 and speaking to our Head of Agri, Joshua Walker.