Structured commodity finance (SCF) as covered by Trade Finance is split into three main commodity groups: Metals & Mining, Energy, and Soft Commodities (Agricultural Crops).

SCF is a financing technique utilized by a number of different companies, primarily producers, trading houses, and lenders. Commodity producers stand to benefit from SCF by receiving financing to ensure cash flow is available for maximum output with the intention of repaying the loan once exports begin. Trading houses employ SCF largely as a means of risk mitigation to reduce their exposure to a single country or commodity; SCF allows them to mitigate any supply, demand, or price shocks. Lenders seek out opportunities to help assist commodity producers in accessing new markets and customers, this also benefits them through gaining interest on the loan.

SCF provides liquidity management and risk mitigation for the production, purchase, and sale of commodities and materials. This is done by isolating assets, which have relatively predictable cash flow attached to them through pricing prediction, from the corporate borrower and using them to mitigate risk and secure credit from a lender. A corporate therefore borrows against a commodity’s expected worth.

Without global financing, there is no trade

The Trade and Commodity Finance business unit combines Bayrock’s long-term expertise in agricultural commodities, energy, and metals finance. Our aim is to be your one-stop trade flow solution provider. In-depth product knowledge, embedded in a global branch network, forms the basis of our professional support for all your international trade finance transactions. We can customize a range of specialized products to suit your company’s specific needs.

The world’s population is growing at an unprecedented rate. The demands of consumers worldwide are increasing at a similar rate, but production possibilities vary by country and continent. The traditional relationships between producer and consumer countries are changing. Resources must be handled smartly to ensure the earth can continue to meet growing consumer needs and global prosperity continues to increase. This is where commodity traders step in with the help of  Bayrock Services because without global financing there is no trade. Trade finance facilities that required commodities to reach consumers around the world.