Assume you are the owner of a very large soybean farm inArgentina, a country located in South-Eastern South America.Soybean is a commodity which is traded globally. 70% of allsoybeans are used as chicken and pig feed. It has been widelyrecognised as a very efficient source of protein and energy.Another use for soybeans is splitting (or crushing) it up intosoybean meal and soybean oil – 80% becomes the meal and 20% theoil. Much soybeans are grown in South America (~31% of world totalin Brazil, ~18% in Argentina), and demandfor the soybean, soybeanmeal and soybean oil is growing very fast in Asia (especiallyChina). One day, you received an unexpected and peculiar call fromZambia (a landlocked nation in Africa). The person over the lineidentified himself as a procurement officer of LivingstoneInternational. He spoke fluent Spanish and asked if you can sellhim two shipments of unprocessed soybeans. His request is largeenough to clear out 80% of your annual harvest. The issue is youhave never sold on the international front as you have always soldyour harvest to the domestic merchants. Question 1 As the owner ofthe soybean farm in Argentina, you have never sold on theinternational front. 1. Research and briefly explain all thepossible risks involved if your soybean farm is expanding intoglobal trade. [Hint: Please organise all your research materialsinto FIVE (5) categories of risks. It is expected to be between 1and 2 pages for this question.]
Note: financial risk, credit risk, country risk, etc.
