Relevant to: Buyers and Growers
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When agreeing upon the terms of an AgriDigital contract, you will elect one of the following three payment scales for the commodity in question:
- Flat Payment Scale
- AOF Pay Scale Basis 42% Oil and 0% Admix
- AOF Pay Scale Basis 42% Oil (Cap 46%) and 0% Admix
Each of the above payment scales have different implications on the final price per tonne that is calculated in the contract. It should be noted that all payment scales calculations act upon the price per tonne after location adjustments and grade spread adjustments.
Flat Payment Scale
The flat payment scale means that, upon delivery, there is no adjustment to the agreed upon price per tonne of the commodity.
AOF Pay Scale Basis 42% Oil and 0% Admix
This payment scale outlines conditions under which Canola price per tonne is subject to change. In essence, the standard requirement is that the Canola delivered consists of 42% oil, and no impurities (admix). For every 1% (above 0) of admix, 1% is deducted from the base price (post location adjustments and grade spreads) per tonne. Following this, the percentage of oil is measured, and for every 1% above or below the 42% oil requirement in a given delivery, 1.5% will be added or deducted (respectively) from the post admix adjusted price. For example, a base price of $500 per metric tonne, with 1% admix and 40% oil will be adjusted as follows:
$500 - 0.01x500 = $495 (giving the post admix adjusted price)
$495 + (40-42)x0.015x495 = $480.15, giving the final adjusted price per tonne.
AOF Pay Scale Basis 42% Oil (Cap 46%) and 0% Admix
This Payment Scale has the same effect as the AOF payment scale above, except that any increase in the price per metric tonne is capped at 6%. Essentially, this means that a delivery that has 50% oil will receive the same price increase as a batch that has 46%. To follow with an example, a delivery with a base price of $500 and 55% oil will have a price per metric tonne of 500 + $530.