Nutreco, a livestock feed producer based in Maastricht, imports soya beans from abroad, processes

and stores them in their facilities and sells the feed in the domestic market. The beans are ordered

by Buenos Aires$-$based agrifoods producer Bunge at an agreed USD price, are transported by ship, paid upon cargo delivery, stored and used into production at a later date. Nutreco orders quantities

according to prearranged deals with clients $($i$.$e$.$ does not order quantities that are not allocated to

client orders just to have stock$),$ does not want to use cash reserves for cargo payments and is paid

by clients upon product $($livestock$)$ delivery. Nutreco is considered to have ownership of the soya

beans upon purchase, i$.$e$.$ at placing the order and agreeing the price. Ignore the captain$$s liabilities

or other non$-$financial insurance risks during travel.

Identify the risks the company faces and hedge them. State all the transactions and financial assets

involved and describe the rationale behind the positions in your answer.

Hint: You do not need to do calculations but can use symbols and notation to help with explanation.