The volatile global economic environment in the wake of Covid has particularly impacted the world of trade finance and supply chain management. Physical shipping delays and surging commodity prices have compounded existing issues treasurers face, such as a lack of transparency, and slow, paper-based processes. But a new wave of digital trade finance platforms could offer a solution to corporates in these demanding times.
The past couple of years has thrown various challenges at treasurers in the trade and supply chain space, as global, political and macroeconomic events have caused extreme market volatility.
Vincent Almering, Group Treasurer, at Dutch dairy commodity trading firm Interfood Group, comments: “The macroeconomic environment creates huge implications for the treasury role. But one positive is that it gives the treasurer a seat directly at the management table, because liquidity is definitely in the spotlight. A company such as Interfood doesn’t have much excess cash balances. We mainly draw working capital under our funding lines, so whatever happens in the markets, we must monitor this very closely.”
Interfood has a turnover of about €2.5bn and approximately €500m of working capital lines. As a pure-play commodity trader, the company is relatively asset light, typically resulting in high volumes and low margin business, meaning the pressure is on for treasury to be as cost-effective as possible.