Examples of using Structured commodity finance in English and their translations into Arabic
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Structured commodity finance and the poor 11- 14.
(b) Risk management and structured commodity finance.
Thus, structured commodity finance supplements microfinance, rather than competing with it.
This form of finance is known in western banks as structured commodity finance.
Structured commodity finance is not a good tool with which to target income transfers to the poor.
This paper contains the conclusions and recommendations of a group of experts on structured commodity finance.
Structured commodity finance can be a tool for the inclusion of poor farmers in the development process, but only if deliberate action is taken.
UNCTAD/ITCD/COM/MISC.39 Report of the ad hoc expert meeting on applications of structured commodity finance techniques for commodity-dependent countries.
A structured commodity finance transaction should be self-financing and, thus, sustainable: no public subsidies should go into the transaction.
In addition under this item, the attention of the Commission will bedrawn to the report of the ad hoc expert meeting on applications of structured commodity finance techniques for commodity-dependent countries.
The experts saw lack of awareness about structured commodity finance as a major problem, and one that had needed be dealt with in order to create client-driven demand for training and education.
An environment where integrity is not honoured and where it is considered acceptable to abuse public confidence for private gain is not conducive to thedevelopment of any economic activity, including structured commodity finance.
Over the past two decades, structured commodity finance(SCF) has been developed to address the financing needs of main operators of commodity supply chain in developing-country markets.
Temporarily, government agencies using market instruments can allow farmers andothers to access structured commodity finance, which may overcome institutional bottlenecks and therefore solve immediate problems.
Structured commodity finance will become popular with banks only if there is an active secondary market where the banks that initiate such business can refinance some of their operations.
Fair trade organizations andother non-governmental organizations may wish to explore the possibilities of structured commodity finance to refinance products at the moment they are produced, thus enabling them to leverage their risk capital.
The experts discussed how structured commodity finance, in particular in the agricultural sector, could contribute to development and help to alleviate poverty, which policies and practices hindered the use of such finance and what measures could enhance that use.
In line with the orientation of the preparations for UNCTAD X, which will be held in Bangkok, Thailand, in February 1999, the ad hoc expert meeting which tookplace in May 1999 focused on ways in which structured commodity finance could contribute to enhancing development and alleviating poverty.
Structured commodity finance is not a panacea to the problems of development but, contrary to the direct provision of credit, it strengthens private sector institutions rather than undermining them. Providing access to structured finance can therefore unlock much of the growth potential of commodity production and processing.
They urged the international donor community tosupport country-level efforts to improve the environment for structured commodity finance and to support the activities undertaken by the World Bank and UNCTAD, as well as by other organizations which might become involved in the area.
While such problems vary widely from country to country, regulations regarding the ability of borrowers to provide collateral, escrow accounts, export licensing and bankruptcy rules often run counter to the requirements of warehousereceipt finance and related forms of structured commodity finance.
The experts agreed that while structured commodity finance was not a panacea, it could unlock much of the growth potential of commodity production and processing, while enabling the less powerful links in the marketing chain(farmers and small traders) to improve their bargaining power, and developing countries to compete in a global market place.
At its eighth session, in February 2004, the Commission on Trade in Goods and Services, and Commodities decided to convene an expert meeting on financing commodity-based trade and development(TD/B/COM.1/67, annex II). This paper is part of a series of papers, articles, presentations, and advisory andtechnical assistance materials developed by UNCTAD over the past 10 years on structured commodity finance and related issues.
Although it is virtually impossible totarget such institutional support exclusively at the poor, structured commodity finance does not discriminate against the poor. Indeed, it enables many farmers and other producers to obtain access to bank credit. Its capacity to reach the poorest, however, is limited when compared to financing mechanisms such as microcredit.
Development partners committed to strengthening activities covered by the Second Account of the Common Fund for Commodities(Programme of Action, para. 68(v)) and the Fund in turn has undertaken to finance, within its resources and through co-financing, projects which were identified in preparation for the Conference related to enhancing productive capacities, post-harvest measures and appropriate storage to minimize post-harvest losses, and financing, including input credit,price risk management and structured commodity finance.
Structured commodity finance(which includes products such as export receivables-backed financing, inventory financing, prepayments and the more sophisticated asset-backed securities) developed mainly in response to the need to overcome increasing difficulties in raising finance following the withdrawal of government agencies from marketing, and the demise of several large trading houses in the 1980s.
These areas could include improving the ability of enterprises in commodity-dependent developing countries, in particular LDCs, to function successfully in increasingly complex markets; enhancing market transparency, information flows and analytical capacities; eliminating trade-distorting practices; making the international" playing field" more equitable for smaller and weaker participants;promoting structured commodity finance and the use of price risk management instruments; and measures to promote vertical and horizontal diversification in commodity-dependent developing countries.
The experts examined the possible applications of structured commodity finance techniques, particularly in the agricultural sector, discussed which government policies and practices might hinder the use of such techniques and hinder the ability of the poor to draw benefits from their use, and identified positive measures which could be taken by Governments, the private sector and the international community to enhance the use of structured commodity finance techniques for developing the commodity sector, in particular to the benefit of farmers.
The representative of Lesotho, presenting the outcome of a joint CFC/UNCTAD Workshop on Enhancing Productive Capacities and Diversification of Commodities in LDCs and South-South Cooperation, held in Geneva on 22 and 23 March 2001, said that attention at the Workshop had focussed on enhancing productive capacities and competitiveness; vertical, horizontal and geographical diversification of commodities; commodity market development; and structured commodity finance, price risk management,commodity development financing and foreign direct investment.
The experts also noted that structured commodity finance includes products such as export receivables-backed financing, inventory financing(also known as warehouse receipt financing), prepayments and more sophisticated instruments such as asset-backed securities, and that overall“this form of finance allows for wider possibilities than other forms of short-term financing, which are normally limited to companies with acceptable credit risk or conditional upon onerous security, and gives access to financing on better terms”.