This series on commodity risk management aims to disseminate the results of World Bank research that describes the feasibility of developing countries’ ability to utilize market-based tools to mitigate risks associated with commodity price volatility and weather.
Warehouse receipt financing and similar
types of collateralized lending provide an alternative to
traditional lending requirements of banks and other
financiers and could provide opportunities to expand this
lending in emerging economies for agricultural trade. The
main contents include: what is warehouse receipt financing;
what is the value of warehouse receipt financing; other
collateral lending mechanisms; tradable receipt financing --
the example of cedula de produto rural in Brazil; and the
use of reverse factoring -- the example of nafin in Mexico.
The paper concludes that through innovative approaches in
different emerging markets both warehouse receipts and
innovative collateralized lending mechanisms could provide
opportunities to expand the levels of post-harvest financing
being provided to producers, traders, processors, and other agribusinesses.