The LCSSD Occasional Paper Series is a publication of the Sustainable Development Department (LCSSD) in the World Bank’s Latin America and the Caribbean Region. The papers in this series are the result of economic and technical research conducted by members of the LCSSD community. The series addresses issues that are relevant to the region’s environmental and social sustainability; water, urban, energy and transport sector development; agriculture, forestry and rural development; as well as cross-cutting topics related to sustainable development such as climate change; logistics; crime and violence; and spatial economics. While all papers in this series are peer reviewed and cleared by the LCSSD Economics Unit on behalf of the Director of LCSSD, the findings, interpretations, and conclusions expressed in this paper, as in all publications of the LCSSD Occasional Paper Series, are entirely those of the authors and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent. The World Bank does not garantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use.
Agricultural Commodity Exchanges in Latin America and the Caribbean
2011-03-17, Arias, Diego, Ferreira Lamas, Alfredo, Kpaka, Musa
A commodity exchange is a goods and
financial market where different groups of participants
trade commodities and commodity-linked contracts, with the
underlying objective of transferring exposure to commodity
price risks (UNCTAD). A commodity exchange that only trades
goods is known as a physical or 'cash or forward'
market, while the exchange that trades price derivatives is
known as financial or 'futures and options' market
(see Glossary for detailed definitions). Some agriculture
commodity exchanges have both. Agricultural commodity
exchanges date as far back as the early 18th century. Modern
exchanges, notably the Chicago Board of Trade (CBOT) was
created in 1848, recently merged with the Chicago Mercantile
Exchange (CME), is one the oldest and most successful
futures exchanges worldwide. Today several agricultural
commodity exchanges exist throughout the Latin America and
Caribbean (LAC) region. They facilitate trade and financial
products in countries whose economies have a relatively
large share of primary and secondary agricultural activities
or either account for auctions on substantial food imports.
This report looks at the current development of agricultural
commodity exchanges in the LAC region and offers public
policy recommendations that can foster the development of
such exchange markets.