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Speculation in the agricultural commodity market

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  • Czech, Katarzyna

Abstract

This paper studies the role of speculators in explaining agricultural commodity price movements. The spikes in global agricultural commodity prices in 2007-2008 and 2010 2011 have opened a debate on the contribution of speculation to recent food price volatility. Most academic literature does not support the idea that speculators drive commodity prices beyond fundamental levels. There are, however, some researchers who do find empirical evidence supporting the idea that the activity of speculators affects commodity prices. This paper concludes that the activity of speculators may temporarily overprice or underprice commodity values. It is assumed, however, that both fundamental and financial factors influence commodity prices. Nevertheless, it is difficult to indicate the extent to which each factor separately affects prices.

Suggested Citation

  • Czech, Katarzyna, 2013. "Speculation in the agricultural commodity market," Problems of World Agriculture / Problemy Rolnictwa Światowego, Warsaw University of Life Sciences, vol. 13(28), pages 1-8, December.
    • Handle: RePEc:ags:polpwa:190771
    DOI: 10.22004/ag.econ.190771
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    References listed on IDEAS

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    5. Working, Holbrook, 1960. "Speculation on Hedging Markets," Food Research Institute Studies, Stanford University, Food Research Institute, vol. 1(2), pages 1-36.
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    8. Girardi, Daniele, 2012. "Do financial investors affect the price of wheat?," MPRA Paper 40285, University Library of Munich, Germany.
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    14. repec:dau:papers:123456789/607 is not listed on IDEAS
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    Cited by:

    1. Czech, Katarzyna, 2016. "Structural Changes in Wheat Market," Problems of World Agriculture / Problemy Rolnictwa Światowego, Warsaw University of Life Sciences, vol. 16(31), pages 1-7, December.

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