© 2018-2019 The Weather Option Ltd 

AGRICULTURE & FOOD

PRODUCTION

CHALLENGE

  • Adverse weather conditions (frost, excess heat, drought, excess moisture) could reduce yields and degrade quality of crops. 

  • International trade could drag prices down even in case of poor local harvest resulting in very low farm revenues

  • Traditional insurance covers high deductible and exclusions leave growers with protection gaps on most of their crops. Claim process of traditional insurance covers is painful, and payment happens only long time after the covered loss event occurs.

  • Financial options to hedge price risk are only available for a few crops and do not enable adjustment to the actual production and therefore often lead to over-hedging.

WHAT WE DO

  • Training to index-based weather insurance that enables quick payouts, quanto options that offers quantity-adjusted price hedges.

  • Independent risk management analyses with joint modelling of volumetric and price risks.

  • Design of index-based risk transfer solutions, analysis of associated basis risk and independent valuation.
     

SERVICES 
 

 

A FEW USE CASES

VINEYARD

Spring Frost

MAIZE

Drought

HAZELNUT

Spring Frost

CABBBAGE

Excess Heat

POTATO

Low revenue

WHEAT

Heat Stress

APPLE

Spring Frost

CUCUMBER

Excess moisture

PASTURE

Low yield

RAPESEED

Spring Frost

CHERRY

Spring Frost

TOMATO

Excess moisture

TRADING

CHALLENGE

  • Local production shortfall reduces revenues of cooperatives and local grain traders. 

  • Unexpected deviations of yields from their expected values at harvest time and large moves on prices that generally follows make it difficult to achieve a good average selling price for cooperative members.

  • Financial options to hedge price risk are only available for a few crops and do not enable adjustment to the actual production and therefore often lead to over-hedging.

WHAT WE DO

  • Training to index-based weather insurance that enables quick payouts, quanto options that offers quantity-adjusted price hedges.

  • Independent risk management analyses with joint modelling of volumetric and price risks.

  • Design of index-based risk transfer solutions, analysis of associated basis risk and independent valuation.

 

SERVICES 
 

A FEW USE CASES

ALL CROPS

Portfolio Margin Cover for cooperatives

GRAINS

Average Price Cover for cooperatives

SOFTS

Quanto hedge for  international traders

PROCESSING

CHALLENGE

  • Production shortfall significantly reduces revenues and margins.>

  • Excess production creates opportunistic competition from white-label brands that erodes market share and damage client loyalty.

  • Weather conditions (excess moisture, frost, excess heat) could damage stocks.

  • Adverse weather conditions could significantly increase processing costs.

WHAT WE DO

  • Training to index-based weather insurance that enables quick payouts, quanto options that offers quantity-adjusted price hedges.

  • Independent risk management analyses with joint modelling of volumetric and price risks.

  • Design of index-based risk transfer solutions, analysis of associated basis risk and independent valuation.

 

SERVICES 
 

A FEW USE CASES

MILLING WHEAT

Margin Cover

FRENCH FRIES

Quanto Call

SUGAR

Cold Winter/Spring

RETAIL

CHALLENGE

  • The consumption of food products is weather-sensitive and therefore retailers revenues depend on the weather and their ability to factor weather forecast information in their operations and especially stock management.

WHAT WE DO

  • Training to weather intelligence and index-based weather risk transfer solutions.

  • Independent weather risk management analyses. 

  • Design of index-based risk transfer solutions, analysis of associated basis risk and independent valuation.

 

SERVICES 
 

A FEW USE CASES

ICE CREAM

Cool Summer

RASPBERRY

Rainy Summer

CHOCOLATE

Warm Winter