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Tea Swaps

Tea Swaps. Growing Confidence in the Future. James.Montlake@teaswap.co.uk. Tea Swaps. James W. Montlake BSc., MA, Managing Director. Tea Swaps. Price Confidence. James.Montlake@teaswap.co.uk. WHO. WHAT. WHY. WHEN. James.Montlake@teaswap.co.uk. WHO. James.Montlake@teaswap.co.uk.

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Tea Swaps

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  1. Tea Swaps Growing Confidence in the Future James.Montlake@teaswap.co.uk

  2. Tea Swaps James W. Montlake BSc., MA, Managing Director

  3. Tea Swaps Price Confidence James.Montlake@teaswap.co.uk

  4. WHO WHAT WHY WHEN James.Montlake@teaswap.co.uk

  5. WHO James.Montlake@teaswap.co.uk

  6. Who trades Tea Swaps in Sri Lanka? “improved budgeting” “improved budgeting” “improved cash-flow management; lower borrowing rates and easier to spend/invest” “improved cash-flow management; lower borrowing rates and easier to spend/invest” “easier to offer fixed prices to clients” “protection from price volatility” “protection from price volatility” “easier to offer fixed prices to clients” James.Montlake@teaswap.co.uk

  7. Tea Swap volume traded since Inception kgs traded Total volume = 700,000 kgs James.Montlake@teaswap.co.uk

  8. Tea Swap Trials James.Montlake@teaswap.co.uk

  9. Tea Swap Trial East Africa 23 leading East African Tea Companies trialing Swaps

  10. Tea Swap trial East Africa • “Tea Swaps have tremendous potential to protect our business against auction price volatility and assist us to improve our financial forecasting. • We have found the Tea Swaps to be fairly simple to understand and use. • Joseph Ngige, General Manager, Karirana Estates Limited James.Montlake@teaswap.co.uk

  11. Who else trades Swaps? http://www.farmdoc.illinois.edu/nccc134/conf_2014/pdf/Peterson_NCCC-134_2014.pdf James.Montlake@teaswap.co.uk

  12. Tea has been absent from Swap markets Tea Coffee Orange Juice Cocoa Milk Swaps Wheat Sugar James.Montlake@teaswap.co.uk

  13. WHAT James.Montlake@teaswap.co.uk

  14. Tea Swaps Price Confidence James.Montlake@teaswap.co.uk

  15. How does the Tea Swap work? Factory Price Auction Prices James.Montlake@teaswap.co.uk

  16. How does the Tea Swap work? Fixed Price Fixed Price at $2.90 / kg James.Montlake@teaswap.co.uk

  17. How does the Tea Swap work? Fixed Price Factory Price Tea is sold in the Auction as normal James.Montlake@teaswap.co.uk

  18. How does the Tea Swap work? $0.13 $0.02 Fixed Price $0.09 $0.22 Factory Price Swap payment is the difference between Auction price and fixed Swap Price James.Montlake@teaswap.co.uk

  19. How does the Tea Swap work? $0.13 $0.02 Fixed Price $0.09 $0.22 Factory Price Swap payment is the difference between Auction price and fixed Swap Price James.Montlake@teaswap.co.uk

  20. How does the Tea Swap work? $0.13 $0.02 Fixed Price $0.09 $0.22 Factory Price Swap payment is the difference between Auction price and fixed Swap Price James.Montlake@teaswap.co.uk

  21. WHY James.Montlake@teaswap.co.uk

  22. Why trade Tea Swaps? Growing Confidence in the Future James.Montlake@teaswap.co.uk

  23. Why would a Factory trade a Tea Swap? • Better planning • Higher profitability • No short term loans Price Confidence Factory James.Montlake@teaswap.co.uk

  24. Why are Tea Swaps good for Farmers? PRICE CONFIDENCE Farmer Factory James.Montlake@teaswap.co.uk

  25. Why are Tea Swaps good for Farmers? • Better planning • Higher quality • Plan expenses Farmer James.Montlake@teaswap.co.uk

  26. Why are Tea Swaps good for Farmers? Farmer Factory James.Montlake@teaswap.co.uk

  27. Why are Tea Swaps good for Traders? • Plan Blend Price • More Competitive • Long term Quotes Price Confidence Trader James.Montlake@teaswap.co.uk

  28. Why are Tea Swaps good for Packers? PRICE CONFIDENCE Trader Packer James.Montlake@teaswap.co.uk

  29. Why are Tea Swaps good for Packers? • Improved budgeting • Higher return on Capital • Less market risk Packer James.Montlake@teaswap.co.uk

  30. Why are Tea Swaps good for Packers? Trader Packer James.Montlake@teaswap.co.uk

  31. Swaps Benefit Everyone along the Value Chain Tea trade: Swap Prices Farmer Auction Trader/Exporter Packer Factory Tea Swaps Farmer Trader/Exporter Packer Factory James.Montlake@teaswap.co.uk

  32. Appropriate for all sizes of business Small / Medium Business Big Business Forward James.Montlake@teaswap.co.uk

  33. Swap Broker Spread $2.08 $2.12 Swap Broker Tea Buyer Tea Seller Broker makes the Market by dealing in Both Directions James.Montlake@teaswap.co.uk

  34. Structure WHEN James.Montlake@teaswap.co.uk

  35. Tea Swap Trial Timeline March April May June First Simulated Trades Started First Simulated Trades Completed 4th African Tea Convention - KAMPALA Second Simulated Trades Started Tea Swaps workshop – Nairobi and Mombasa Education & Training Roadshow - West Kenya East African Simulated Tea Swap Trial Begins 23 participating Tea Companies in East Africa James.Montlake@teaswap.co.uk

  36. Next Steps June July August September TeaSwap Africa Established First live Swap Trades Completed 4th African Tea Convention - KAMPALA Education and training Roadshow – East Africa Live East African Tea Swap Market Begins James.Montlake@teaswap.co.uk

  37. Key benefits of using Tea Swaps 2 1 3 4 No Impact on Physical Price Confidence Everyone Benefits Improved Finances James.Montlake@teaswap.co.uk

  38. To find out more… James.Montlake@teaswap.co.uk www.teaswap.co.uk +94 76 476 0316 (Sri Lanka) +44 79 084 78226 (UK)

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