Agricultural Supply Chains and the Challenge of Price Risk

ISBN-13: 9780415826983 / Angielski / Twarda / 2013 / 304 str.

John Williams

Opis

This book discusses the issues of integration within food and fibre supply chains and the challenges of price risk. Integration and price risk are interwoven in agricultural supply chains through the problems of production risk and hoarding. Without integration through commercial trade markets there can be no forward market upon which forward transactions and the management of price risk can be based. Without a forward market that can reduce opportunistic behaviour, there is likely to be little security of supply, particularly under high production risk and price uncertainty.

Whilst price risk management is possible under certain circumstances, there are many factors that can prevent or cause forward markets to collapse, thus undermining the ability to manage price risk within acceptable risk and return parameters. Market positions therefore need to be valued and often daily settled because of the risk of contract default. The issue of currency risk and associated management applies to international market positions and transactional exposures.

The book analyses a range of price risk management strategies from forward contracting through to futures and options hedging, and finally to bank over-the-counter products. Evaluation techniques are developed to aid in decision making. The author concludes that forward market development is the exception rather than the norm, and that whilst favourable price risk management outcomes may sometimes be possible, they may be caused more by luck rather than through good management. It is shown how tactics are an important consideration in decision making to minimize costs and losses.

Spis treści

Introduction  1. Integration and Forward Contracting  2. Forward Markets  3. Problems with Risk Management  4. Position, Default, and Valuation  5. Futures Hedging and Basis Risk  6. Options Hedging and Price Enhancement  7. OTC Pricing Products  8. Tactics and Evaluation  9. Post-harvest Issues  10. Currency and Risk Management  11. Limitations in Managing Risk  12. Arbitrage and Spread Trades  Conclusion

O autorze

John Williams is Executive Director of the Food and Fibre Supply Chain Institute, Senior Researcher and Consultant at the Australian Commodity Research Institute, Member of the Institute of Public Affairs, and Fellow in Agribusiness at Marcus Oldham College, Geelong, Australia. He is the author of Competition and Efficiency in International Food Supply Chains (Routledge, 2012), which was shortlisted for the 2013 Commodity Business Award: Commodity Market Policy & Advisory Award.