Volatile exchange rates: five ways to protect your import margin

There is no importer who has never been caught out by the exchange rate. The difference lies between those who treat it as a risk to be managed and those who treat it as fate. In a year of high interest rates, fiscal noise and external tariffs, volatility is here to stay. These are the practices we apply with our clients.

1. Separate the exchange rate from the selling price

The most common mistake is pricing the product at the rate on the day of the order and finding out sixty days later that the margin has evaporated. Set a policy: which rate goes into the price, how often the price list is reviewed and at what variation the adjustment becomes automatic.

2. Use simple hedging, but use it

Forward contracts and non-deliverable forwards are within reach for mid-sized companies and lock the cost of the lot at the moment of the order. That is not speculation: it is the guarantee that the calculated margin will be the realised margin. For recurring volumes, a staggered hedging policy (cover 50% at the order and the rest at shipment) reduces the risk of locking in at the worst moment.

3. Negotiate terms with the supplier, not just price

A supplier who accepts payment at 90 days against documents or a letter of credit changes the currency exposure of the lot. Often a small price concession buys a term that is worth more.

4. Rethink the Incoterm

Buying EXW or FOB and contracting freight in local currency with your logistics partner in Brazil reduces the share of the cost exposed to the dollar. It is not always the best option, but it belongs in the calculation.

5. Plan shipments around the currency calendar

Concentrating shipments in historically volatile periods, such as quarter-end or fiscal events, raises the risk. Spreading lots through the year and keeping safety stock for critical items buys the freedom to wait for a better window.

Exchange rates are not forecast. They are managed.

TMLOG supports clients with landed cost simulations under different currency scenarios and with financial partners for hedging and commercial exchange operations.