Commodity trade processes
As a trader, your main focus is on deals, deal closures and margins. That is what matters. All secondary processes are often considered time-consuming. At the same time your company has to keep control, and in order to follow up and fulfil the contract agreements, details need to be registered and completed.
For DycoTrade this is exactly the reason to develop the Composable Commodity Cloud. How can we make it as easy as possible for every user to register what is needed while having the necessary data right at hand? Ask us for a quick introduction demo, so you can see how it works.
When lifting out a few aspects, let’s put the spotlights on:
Pricing
Depending on the business, commodity traders use a variety of contract types, in combination with different pricing methods. DycoTrade handles them all in one application. Almost every commodity has its own pricing model and contract types depending on a multitude of factors and often related to the physical product pricing like ICE, CBOT, LME, or Platts. Also the foreign exchange rates need to be fixed during a quotation period as well to prevent your margin to being eaten by fluctuating currency rates.
Our main pricing models are the scenario’s of Extended pricing, Component Pricing and Element Pricing.
- Quality based Pricing we see in the dairy trade where the lab results of a sample gives for example the fat percentage of a batch, being a key component of the value of the milk.
- Component Pricing is used in those markets where the final sales price is build up from a ‘base’ product pricing and additional ‘premiums’ on for example freight, insurance, or demurrage.
- Element Pricing is for example used in metals trading when a container of scrap metal consists of multiple different metals each with their own pricing. The price of each individual element may be defined by multiple factors like content percentages, quality levels, and exchange prices. The final price calculation is then based on the net quantity after accounting for contamination, impurities and other weight corrections.
Microsoft Power Platform
With price calculations being so complex and yet so crucial in your business, you have to support your traders and prevent them from errors or mistakes. For your transactional and bookkeeping system, it is important that updates, and insights are constantly available, and reduce integration risks. Here the Microsoft Power Platform comes to the rescue. With the PowerApp you have:
- all quotes in one place
- use of templates: user can have the same settings applied to a new quote
- automatic creation of sales contract line in D365 upon approval
- integrated approval flow
In the end, a full audit trail is provided, so also the accountant can trace back all the steps of a calculation.
See DycoTrade Elements and filter on your commodity for more commodity-specific functionalities.
