Tag: Origo Commodities

Business

Diversifying your portfolio – Investing in commodities

Oct 22, 2021 by Rekha Nair 0 Comments #co-Founder, #Origo Commodities, #Sunoor Kaul

Author: Sunoor Kaul, Co-Founder, Origo Commodities

Diversifying your portfolio is one of the most important things you can do if you’re looking to lower your financial risk. Here, you can take advantage of the overwhelming stability that commodities offer. But what are commodities actually and why you need to invest in them? Commodities are all things that can be traded for consumption, processing or profit. They include everything from gold to coffee. In technical terms, they comprise economic goods that have considerable or complete fungibility.

When we think about commodities, the first few things that come to mind are usually assets like crude, gold, silver, copper, etc. However, by doing so, we miss the scope of other asset classes such as agricultural produce. In terms of supply and demand dynamics, agricultural products, or agri-commodities, typically have limited supplies while their demand is consistent and ever-growing. This facet presents investors with a critical asset class that can be used to make their investment portfolio well-rounded.

Why should you diversify into commodities?

It is important for investors to keep in mind that they need to diversify their investment portfolio whenever possible. This will help mitigate the risks associated with a single asset class while simultaneously providing them a positive impact on their portfolio’s overall performance. However, as with most financial products, you need to understand the underlying dynamics and risks associated with them before you commit your hard-earned money. In this case, there are several reasons why investing in agri-commodities is a great option.
Firstly, the prices of commodities move in correlation with each other. Although they may fluctuate drastically over short periods of time, over the long term they tend to trend higher owing to the seasonality of demand. Another advantage of investing in commodities is that you can use them as a hedge against inflation or deflation risk. Such purchases can also be made in the form of futures contracts, ETFs (Exchange-Traded Funds), or stock.

Types of commodities and how can you invest in them?

There are four main types of commodities, i.e. metals, livestock, energy, and agricultural produce. The metals segment consists of base metals such as copper, gold, silver, zinc, and lead.
Livestock includes the meat and dairy industries. The energy commodities sector consists of crude oil, natural gas, coal, and refined petroleum products like gasoline. Finally, agricultural produce consists of crops such as corn, wheat, soybeans, and sugar.

In terms of where you can invest in them, some of the mainstream places to do so are usually regulated by countries’ governments with jurisdictional rights. However, you can also do this by investing in commodity futures contracts such as gold futures, oil futures, or agriculture futures. Commodities can also be bought privately through individual stock options or ETFs that follow different asset classes.

Why should you invest in agri-commodities?

Agri-commodities are an important sector of the global economy, and their prices are a good reflection of supply and demand dynamics. They also constitute one of the most important asset classes because they are the backbone for global food production and consumption, and their demand and supply typically remain consistent unless there is an extreme weather event.

Today, a sea of change is being observed in the industry with the rise of institutional players in it. As a result, new avenues have been opened in the market with a robust supply chain. Now, given the infrastructural enhancements and a phenomenal digital influx across the board, investors can invest in the agri-commodities segment with considerable flexibility, transparency, and security.

We are also seeing the advent of new Pass-through Certificates (PTCs) in the segment which supports agri-commodity investment with a securitized process backed by receivables (to the tune of 10-11% per annum). Such PTCs further ease the participation as they eliminate the need to understand the market functions. At the same time, agri-fintech players are streamlining the end-to-end process from procurement and financing to storage and sale. They are helping ensure a higher price point of commodities for farmers while simultaneously decreasing the cost of purchase for investors by simply eliminating the prevalent inefficiencies in the entire value chain.

The agri-commodities sector is an undervalued asset class and remains to be one of the best opportunities to invest in future growth. Therefore, it is a good option for investors who wish to diversify their portfolios.

Business World

5 Agri-Tech companies helping in minimizing food wastage and bringing sustainability in supply chain

Nov 27, 2020 by Neel Achary 0 Comments #Agri-tech platforms, #Agriculture, #NinjaCart, #Origo Commodities, #SatSure, #Unnati

India is an agriculture-based country with almost 119 million farmers which accounts for more than half of its population. Agriculture being the primary source of income in the country, the farming community is one of the worst-hit due to the pandemic, with issues like severe disruptions in the trade finance, the farm produces- supply chain and closing down of the local mandis, markets, and transport facilities.

We have curated the list of 5 Agri-tech platforms that are helping the farmers to connect with the buyers, through retailers, e-commerce, and even by directly selling the products to consumers and keep the supply chain functional throughout the pandemic and now on the path of recovery.

  1. Origo Commodities– is India’s leading Agritech commodity financing platform, creating a positive impact on the planet and agri ecosystem. Origo aims to redefine traditional modes of procurement, handling, preserving, storing and financing farm produce, which had been largely ignored by the agri markets. Over a decade, Origo has expanded pan-India, with 500 warehouses operating across 12 states in the country. The primary focus of the business has been on creating financing and supply chain solutions. Origo has become the largest service provider to the government with its warehousing capability and network and is also spearheading a technological transformation in agri supply chain financing through its flagship agri-trade finance platform, TradeFi. Origo operates in 4 areas – Agri-tech, Climate, and sustainability, Tradefinance & Blockchain. It has been responsible for facilitating storage of over 23 million metric tonnes, reducing post-harvest losses by 5 percent, providing additional food security to over 1 million people. Origo has been helping Farmers in price discovery and market linkages.

  1. AgriBazaar– As a full-stack agritech player, AgriBazaar has replicated the physical mandi (marketplace) to an e-mandi aggregator model, through which once a farmer registers and uploads his produce, buyers can place orders for the purchase. Once the deal is complete, AgriBazaar facilitates the logistics of picking up the produce from the farmer’s doorsteps and delivering it to the buyers’ warehouse.  AgriBazaar also helps buyers — from MNCs to small-scale industries — with better price discovery, and sellers with more targeted marketing of their produce. It charges a transaction fee from buyers, while farmers can sell their produce at no additional cost.

  1. SatSure: SatSure has been at the forefront of bringing the best practices of satellite image processing, big data capabilities, and IT to agriculture. It also strives to create a positive impact on the lives of farmers by helping improve crop insurance, innovate on agri lending services, and improve market linkages by creating intervention and decision intelligence frameworks for agri value chain stakeholders. It has mobile app platforms for delivering information on supply statistics of crops and crop stressing in their region. This helps with the decisions on what to sow, when to irrigate or add fertilizers, or prepare for harvest. Large banks and insurance companies in India are also leveraging SatSure’s solutions.

  1. NinjaCart: NinjaCart is an Agri-marketing platform that helps farmers to sell their produce directly to retailers and restaurants. This helps both farmers and the consumers directly as the farmers can get better prices for their crops and there is a constant supply for the consumers as well. NinjaCart’s goal is to make a strong local farmer network and expand its operations. Ninjacart furthered its vision of, ‘Safe food for billion people’ with its first set of residue-free tomatoes, produced in partnership with agri-tech platform Kilofarms.

  1. Unnati: Unnati is a new-age fintech company offering farming lifecycle support to farmers across the country. Driven by data, the brand helps convert farmers into entrepreneurs by handholding them through every stage of the farming cycle with services such as working capital, purchasing the right seeds, nutrients and pesticides for crops, harvesting, and selling the crops. Unnati’s app gives access to agri finance, knowledge support, choice of inputs, tracking farm lifecycle, and access to buyers.