Publication: Agricultural Commodity Exchanges in Latin America and the Caribbean
Date
2011-03-17
ISSN
Published
2011-03-17
Author(s)
Arias, Diego
Ferreira Lamas, Alfredo
Kpaka, Musa
Abstract
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.
Citation
“Arias, Diego; Ferreira Lamas, Alfredo; Kpaka, Musa. 2011. Agricultural Commodity Exchanges in Latin America and the Caribbean. LCSSD occasional paper series on food prices;. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/18020?show=full License: CC BY 3.0 IGO.”