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Importance Of Public Warehouse System For Financing Agribusiness Sector

Author

Listed:
  • Zakić, Vladimir
  • Kovačević, Vlado
  • Ivkov, Ivana
  • Mirović, Vera

Abstract

The aim of this study was to determine the economic viability of the use of warehouse receipts for the storage of wheat and corn, based on the analysis of trends in product prices, storage costs in public warehouses and interest rate of loans against warehouse receipts. Agricultural producers are urged to sell grain at the harvest time when the price of agricultural products is usually lowest, mostly because of their needs for financial sources. Instead of selling products, farmers can store them in the public warehouses and use shorttime financing by lending against warehouse receipt with usually lowest interest rate. In following months, farmers can sell products at higher price and repay short-term loan. This study showed that strategy of using public warehouses and postponing the sale of grains after harvest is profitable strategy for agricultural producers.

Suggested Citation

  • Zakić, Vladimir & Kovačević, Vlado & Ivkov, Ivana & Mirović, Vera, 2014. "Importance Of Public Warehouse System For Financing Agribusiness Sector," Economics of Agriculture, Institute of Agricultural Economics, vol. 61(4), pages 1-15, December.
    • Handle: RePEc:ags:iepeoa:196667
    DOI: 10.22004/ag.econ.196667
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    References listed on IDEAS

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    1. Jean Vasile, Andrei & Ungureanu, Adrian, 2014. "The Importance Of Economic Structure Evolution In Achieving Performance - From Agrarian Economy To Competitiveness In Romanian Economy," Economics of Agriculture, Institute of Agricultural Economics, vol. 61(4), pages 1-13, December.
    2. Back, Janis & Prokopczuk, Marcel & Rudolf, Markus, 2013. "Seasonality and the valuation of commodity options," Journal of Banking & Finance, Elsevier, vol. 37(2), pages 273-290.
    3. Kannapiran, Chinna A., 2000. "Commodity price stabilisation: macroeconomic impacts and policy options," Agricultural Economics, Blackwell, vol. 23(1), pages 17-30, June.
    4. Mirović, Vera & Bolesnikov, Dragana, 2013. "Application Of Asset Securitization In Financing Agriculture In Serbia," Economics of Agriculture, Institute of Agricultural Economics, vol. 60(3), pages 1-14, October.
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    Cited by:

    1. Subić Jonel & Jeločnik Marko, 2023. "Economic Efficiency of Investment in Facilities and Equipment for Grains Storing," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 17(1), pages 1476-1486, July.
    2. Laszlo Kozar & Laszlo Vasa & Gyorgy Ivan Neszmelyi, 2021. "The Opportunities and Challenges of Combined Use of Futures Commodity Exchange and Public Warehouse in the Crop Sector of Vietnam," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 1260-1286.

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