Serving the World Through Agriculture Good Grains International, Inc.

Home Contact Us Site Map Search

Sales & Distribution
Up Market Share Competitive Advantage Lupin Pricing Criteria Market Capture Customer Base Sales & Distribution Advertising & Relations

 

 

Sales and Distribution Strategy

Good Grains International serves as the principal counter trader to farmers and growers of Sweet White Lupin in each of 22 designated World Trade Zones. The farmers buy futures in Lupin seeds and sell futures in Lupin beans. The Company buys futures in Lupin beans and sells futures in Lupin seeds. The Company delivers Lupin seeds on the seed futures contract delivery month. The farmer delivers Lupin beans on the bean futures contract delivery month, to the regional port terminal warehouse. Settlement is by warehouse receipt only.

The Company works exclusively through Regional Commodity Clearing firms, who act as a third party in transactions between the Company and Sweet White Lupin growers in each of the World Trade Zones. Each of these clearing firms will be a member of the International Lupin Exchange (ILE), to be headquartered in Vienna, Austria. All transactions between growers and the Company are in the form of Futures Contracts, traded on the International Lupin Exchange.

Regional Trade Zone clearing firms (Regional Clearing Firms), arrange the counter trades between Good Grains International, Inc. and Lupin farmers in their respective regions, in addition to settling futures by means of warehouse receipts.

The Company operates on a 23 month Trading Cycle. This cycle is illustrated by Table 14:

Table 14

23 Month Lupin Futures Growing/Trading Cycle

Year 1, January 2002 Sell seed to growers for first multiplication.
Year 2, March 2002 Buy back beans from growers and sell seed for second multiplication.
Year 2, July 2002 Buy back beans from second multiplication (50%). Sell as commercial seed to growers - fall harvest (12.5%).
Year 2, September 2002 Buy back beans from second multiplication (25%). Sell as commercial seed to growers - fall harvest (12.5%).
Year 2, October 2002 Buy back beans from second multiplication (50%). Sell as commercial seed to growers for winter harvest (12.5%).
Year 2, December 2002 Buy back beans from fall harvest (50%). Process into oil, flour, fiber. Deliver oil, flour and fiber against December futures contracts. Sell as commercial seed to growers for winter harvest (12.5%).
Year 3, January 2003 Buy back beans from fall harvest (50%). Process into oil, flour, fiber. Deliver oil, flour and fiber against January futures contracts. Sell as commercial seed to growers for summer harvest (25%).
Year 3, March 2003 Buy back beans from winter harvest. Process into oil, flour, fiber. Deliver oil, flour and fiber against March futures contracts.
Year 3, July 2003 Buy back beans from summer harvest (25%). Process into oil, flour, fiber. Deliver oil, flour and fiber against July futures contracts.
Year 3, October 2003 Buy back beans from summer harvest (25%). Process into oil, flour, fiber. Deliver oil, flour and fiber against October futures contracts.

A new 23 month Trading Cycle is begun every calendar year, beginning January.

 

Send mail to webmaster@goodgrains.com with questions or comments about this web site.
Copyright © 2001 Good Grains International Inc, South Africa
Last modified: September 30, 2003