ABIOVE and Serasa create tool to monitor Brazil’s corn contract compliance

RIO DE JANEIRO, BRAZIL – The Brazilian Vegetable Oil Industry Association (ABIOVE) and Serasa Experian announced Tuesday a partnership to implement an ABIOVE tool that will allow corn buyers to know if farmers have complied with the delivery of pre-sold production.

According to a statement from the association, which groups Brazil’s main grain trading companies, the goal is to reduce information asymmetry and prevent buyers from negotiating grain already sold to other agents.

In this way, buyers can see if the traded product may be linked to another contract that has not been fulfilled by the producer.

The move comes amid a decline in the country’s second corn crop due to delayed planting and several drought episodes that affected grain development in some of the key producing states.

In addition, current domestic prices are at high levels given the strong demand from the meat industry, which has put traders on alert regarding the fulfillment of contracts signed in advance.

Earlier this month, ABIOVE President André Nassar said trading companies could face a “challenging” scenario for corn, according to a Reuters report.

“Member companies will feed the ABIOVE tool directly and Serasa Experian will operate this platform and take care of organizing the information in compliance with current data protection and antitrust laws,” the association said Tuesday.

In February this year, ABIOVE announced a similar initiative, with the launch of a tool to monitor compliance with contracts by some producers who sold their crops in advance like never before and tried to renegotiate terms when prices on the market were higher.