Founded in the heart of Colombia, Grupo Diana has spent over half a century producing food products such as rice, grains, oils, and margarine for the well-being and nutrition of Colombian families. Today, with 11 dedicated distribution centres and a team of over 1700, Grupo Diana stands tall in the food production industry. Jorge Rodriguez, the present Head of Vegetable Oils and Fats at Grupo Diana, is no stranger to the brand’s ethos. Before starting his current role, he had already dedicated five years to Grupo Diana, serving as the Head of Strategy and Transformation. It’s been two years since Jorge took his current position, and the learning curve remains steep. “The oils and fats industry is our second-largest commodity group, and as Head of Vegetable Oils and Fats, I oversee the entire business unit and am responsible for its P&L”.
Vesper helps Jorge stay on top of the latest (price) trends in the competitive LATAM market. Jorge explains Vesper is their go-to source for insights on vegetable oil, be it palm, soybean, canola, or sunflower oil. “We find ourselves turning to Vesper every couple of days, as it serves as a one-stop shop, offering everything from price and shipping data to exclusive market updates and reports from both Vesper and third parties.”
“Whenever we obtain a quote from suppliers for Crude Palm Oil, a comparison with Vesper’s benchmark ensures we’re in the right ballpark.”
Forecasting success
Grupo Diana sells primarily to their local Colombian market but also exports to parts of Central America. According to Jorge, Vesper’s price forecasts help him with the exact timing, quantity, and decision-making around these purchases. “The Vesper price forecasts help us determine what direction the market is heading towards and guide us to engage or hold back on purchases. Then, once we’ve settled the specifics like shipment and logistics prices, the next pivotal phase involves negotiating the price of the commodity. Here, Vesper’s Price Index becomes indispensable. Whenever we obtain a quote from suppliers for Crude Palm Oil, a comparison with Vesper’s benchmark ensures we’re in the right ballpark. It’s an invaluable tool that strengthens our hand in weekly negotiations.”
Their primary frame of reference? The Rotterdam CIF price published by the Vesper Price Index, as this is the reference price for exports in Colombia. “Maybe the price between the quote we receive and the VPI is only 2%, but considering we purchase hundreds of tonnes every month, that’s a lot of money.” Jorge illustrates.
Vesper & duo-supplier strategy
For Grupo Diana partnering with just two suppliers and utilizing Vesper’s data is enough to attain sufficient negotiation power. “Sometimes we also use Vesper’s futures page – we refer to soybean oil future prices from Chicago and palm oil future prices from Malaysia’s BMD. As I’ve emphasized earlier, Vesper serves as our comprehensive source of information.”
Vesper provides insights on spot and forward pricing but also offers real-time data from BMD, CBOT, MATIF, ICE, DCE, and ZCE stock exchanges in a simplified and easy-to-grasp visualization.
Adapting formulas
Beyond just pricing, Vesper plays a role in Grupo Diana’s product formulas. Vesper’s market Highlights, assessed by Grupo Diana’s Purchasing Director, offer a deeper understanding of the current and potential future market trends. Vesper’s Highlights report on the latest prices and short- and long-term sentiment, substantiated by Vesper’s in-house market analysts.
These insights empower the company to adapt product formulas strategically. “For instance, alternating between palm and soybean oil or even exploring canola and sunflower oil options, all depend on the price trends forecasted by Vesper,” Jorge explains.
