DAMATE Group is a Russian agricultural holding company holding company, involved in three businesses: turkey production and processing, dairy farming and milk processing.

23 January 2019

Damate Group is actively hedging soybean meal risks

Damate Group was the first among the poultry companies to hedge the risks associated with changes in prices of soybean meal. The first deals, covering the period September-December 2018, were closed this week. Their amount was $ 7.6 million. The transaction partner of Damate was Sberbank of Russia, with whom a general agreement had been signed earlier.

Soybean meal is one of the most important components of turkey fodders, the share of which can reach 30% depending on the recipe. Due to hedging, Damate expects to significantly reduce the risks associated with changes in prices for this position, which further will positively affect the cost of production.

"Our team keeps working in accordance with the company's strategy to increase business efficiency and reduce risks. Derivative financial instruments, despite the wide distribution around the world, are not so often used in Russia and, especially, in the agricultural sector," said Stanislav Varich, the Deputy CEO of parent company Damate."  We appreciate that our partner banks are able to conduct similar transactions on an international level and on attractive terms. Soybean meal is one of the most significant and volatile elements in production prime cost. The closed deals will allow us to avoid risks of a sharp increase in costs and positively affect the financial stability of the company."

August 21, 2018