{"url_path":"/sec/afriw/10-k/2026/item-11","section_key":"item-11","section_title":"Item 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1903870/0001493152-26-023781-index.html","accession_number":"0001493152-26-023781","cik":"0001903870","ticker":"AFRI","issuer_name":"Forafric Global PLC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1903870/0001493152-26-023781-index.html","primary_entity_key":"0001903870","primary_entity_name":"Forafric Global PLC"},"word_count":615,"has_tables":true,"body_markdown":"**Item\n11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**\n\n \n\n**Foreign\nExchange Risk**\n\n \n\nThe\nCompany’s functional currency is the MAD, and its presentation currency is the USD. Our global operations require active participation in foreign exchange markets. Our primary foreign currency exposures\nare the Moroccan Dirham, US Dollar and Euro. To reduce the risk arising from foreign exchange rate fluctuations, we may enter into derivative\ninstruments, such as foreign currency forward contracts, swaps, and options. The changes in market value of such contracts have a high\ncorrelation to the price changes in the related currency exposures. Our results of operations and cash flows are subject to fluctuations\ndue to changes in foreign currency exchange rates, particularly changes in the Moroccan Dirham to the U.S. dollar and Euro. Substantial\nchanges in the exchange rate could have a material effect on our clients, our business and our profitability. From the beginning of 2023,\nthe Company entered into foreign currency forward contracts to reduce the risk arising from foreign exchange rate fluctuations.\n\n \n\n**Credit\nRisk**\n\n \n\nThrough\nour normal business activities, we are subject to significant credit and counterparty risks that arise through commercial sales and purchases.\nWe define credit and counterparty risk as a potential financial loss due to the failure of a counterparty to honor its obligations. The\nexposure is measured based upon several factors, including unpaid accounts receivable from counterparties. Credit and counterparty risk\nalso includes sovereign credit risk. We actively monitor credit and counterparty risk through a regular review of exposures and credit\nanalysis by regional credit teams, as well as a review by corporate committees that monitor counterparty performance. We record provisions\nfor counterparty losses from time to time as a result of our credit and counterparty analysis.\n\n \n\nDuring\nperiods of tight conditions in global credit markets, downturns in regional or global economic conditions, and/or significant price volatility,\ncredit and counterparty risks are heightened. This increased risk is monitored through, among other things, exposure reporting, increased\ncommunication with key counterparties, management reviews, and specific focus on counterparties or groups of counterparties that we may\ndetermine as high risk.\n\n \n\n- 54 -\n\n \n\n \n\n**Liquidity\nRisk**\n\n** **\n\nLiquidity\nrisk is the risk that we will encounter difficulty in meeting the obligations associated with our financial liabilities that are settled\nin cash. Cash flow forecasting is performed in our operating entity level. We monitor forecasts of our liquidity requirements to ensure\nwe have sufficient cash to meet operational needs. We may be reliant on our ability to raise additional investment capital from the issuance\nof debt or equity financing, as well as exploring cost-reduction initiatives and the potential sale of non-core assets, to fund our business\noperating plans and future obligations.\n\n \n\n**Commodities\nRisk**\n\n \n\nWe\noperate in many areas of the food industry, from agricultural raw materials to the production and sale of branded food products. As a\nresult, we purchase and produce various materials, many of which are agricultural commodities, including: flour, semolina, pasta and\ncouscous.\n\n \n\nAgricultural\ncommodities are subject to price fluctuations due to a number of unpredictable factors that may create price risk.\n\n \n\n**Interest\nRate Risk**\n\n \n\nInflationary\nfactors generally affect us by increasing our labor and overhead costs, as well as costs related to those items associated with certain\nrisks identified above, which may adversely affect our results of operations and financial position. We have historically been able to\nrecover the impacts of inflation through sales price increases, however we cannot reasonably estimate our ability to successfully recover\nany impact of inflation through price increases in the future. Our inability to do so could harm our results of operations and financial\nposition.\n\n \n\n**Inflation\nRisk**\n\n \n\nIn\nrecent years, inflation has not had a material impact on our results of operations."}