The relationality of futures markets for east African countries' export crops, with special reference to coffee futures market

Tlegray, John B. (1994) The relationality of futures markets for east African countries' export crops, with special reference to coffee futures market The University of Queensland:

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Author Tlegray, John B.
Title of report The relationality of futures markets for east African countries' export crops, with special reference to coffee futures market
Formatted title


Publication date 1994
Place of publication The University of Queensland
Total pages 85
Language eng
Subjects 1503 Business and Management
Formatted abstract
The coffee industry is in chaos due to failure to agree on the economic provisions of the International Coffee Agreement (ICA) in June 1989. That failure set in motion the onslaught of the free-market. Trading in a free market means increased uncertainty in the export revenues for the East African countries. Futures markets are proposed as a means of reducing this uncertainty in the short-run.

The history of the futures markets is reviewed to see the acceptability of these markets for managing risk. Available literature shows that this markets are highly acceptable and trading volume in them has tremendously increased.

A brief review of how the futures markets are organised and how they can be used to hedge a commodity is made. It was found that the producers could lock-in a price and this could ensure a certain level of income, all other things being equal.

In the final analysis considerations of their relative share of coffee market, lack of cohesion on the part of coffee producers, and the predominance of the freemarket ideology, leave the East African states no other rational choice but to use the futures markets to stabilize revenues.


Document type: Research Report
Collection: MBA reports
 
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Created: Thu, 06 Jan 2011, 12:22:05 EST by Ning Jing on behalf of The University of Queensland Library