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INVC Warehouse Receipt System
Transcript of INVC Warehouse Receipt System
The Life of a Warehouse Receipt
A commodity is deposited in a registered and certified facility
The storage operator issues a warehouse receipt, thereby guaranteeing quantity and quality
The depositor requests financing from a preferred bank and receives the loan immediately
Monitoring and Sale
The depositor monitors market prices and decides to put the receipt for sale on ACE when prices are attractive
A buyer accepts the offer and ACE generates a contract
The buyer deposits the funds into the ACE settlement account
ACE settles the finance, storage and all other charges and transfers ownership of the receipt to the buyer
ACE transfers the balance to the seller, i.e. the depositor
Collection or Renewal
The new owner can either collect the commodity or request new financing from a bank backed up by his new warehouse receipt
The End or the Beginning
The receipt is canceled in the system if the commodity is collected. It becomes a past receipt.
If not, the sequence starts again.
Why store under the ACE Warehouse Receipt System
Quality and Quantity Guarantee
Certified Storage Operators
Access to Finance
High post-harvest losses are an expensive problem.
Professional storage operators are experts in crop management.
They can guarantee quality and quantity.
While safely in storage, depositors can avoid problems like theft.
Quantity and quality are specified on the warehouse receipt.
Higher graded commodities are worth more and can access better markets, such as export ones.
A warehouse receipt can afford the depositor to wait until prices increase, instead of selling right after harvest when prices are at their lowest.
Prices tend to increase after harvest and throughout the lean season.
Ultimately, however, prices depend on supply and demand. Government interventions may also have an effect.
Price speculation is risky. Depositors need to monitor the market closely to avoid making a loss on their receipts.
Any depositor can use his ACE warehouse receipts as collateral to get a loan from the bank.
A loan can help a depositor meet his needs until he decides to sell his commodity.
The depositor keeps ownership of the commodity until it is
sold--transferred or collected.
Quality and quantity guarantees are attractive to important buyers who might be willing to pay a premium: the export market, the World Food Program, the National Food Reserve Agency, forward contract buyers, etc.
Access to Inputs and Transport
A depositor can access seed, fertilizer and transport on the back of his warehouse receipt, allowing him to plan ahead and plant in good time, even if his receipt has not been sold.
Settle costs upon sale of receipt
Warehouse Receipt System
Certified Storage Facilities
What is a warehouse receipt?
It is a document that provides proof of ownership of a commodity that is stored in an ACE-certified warehouse.
A warehouse receipt shows the depositor's personal information, the warehouse's details and commodity specifications--tonnage, moisture level, variety, grade.
They are negotiable, which is to say they allow transfer of ownership of that commodity without having to physically deliver it.
What happens at the warehouse?
These details are carefully recorded and included in the warehouse receipt.
Sampling, grading, handling, re-bagging, stacking, documenting
ACE wants to improve the way agricultural marketing happens in Malawi and the region.
ACE wants to empower to commodity owner to make sound post-harvest and marketing decisions by providing him with a range of post-harvest options.
The warehouse receipt system is one of those options.
ACE and the Warehouse Receipt System