Canada Wheat Corp. A Canadian Company has been engaged in the export of wheat to Japan in sizeable quantities for many years. The details of each order vary from time to time, but average contract is about USD $5,000,000 per quarter. All pricing is determined using the spot rate USD/CAD on the first day of the quarter for the ensuing quarterly shipment. Given that wheat crops can be affected by weather in Canada, the Canada Wheat works closely with the bank for solutions to protect against adverse weather conditions.

The export transactions are supported by documentary collection and the Canada Wheat allows for 30 days after receipt of goods to pay the draft amount. Most input costs for the Canadian exporter are sourced from within Canada and paid in Canadian Dollars. (Transportation costs are ignored in this scenario). The Canadian company is currently maxed out on its credit line due to the pandemic and occasionally requires cash in between transfer of title and the payment date.

Assignment Instructions:

Identify the risks and possible solutions for mitigation. Please keep them specific to the above scenario and refrain from listing generic international trade risks and strategies.