IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2019-01-9.html
   My bibliography  Save this article

Evaluation of Commodity Market Experiences: More Than a Design Issue

Author

Listed:
  • Necla Ilter Kucukcolak

    (Director at Takasbank, Istanbul Takas ve Saklama Bankas A. ., Borsa Istanbul Cad. No.6 stinye Sar yer 34467, Istanbul, Turkey.)

Abstract

Major benefits of the organized commodity markets will be efficient price formation, transparency improvement, decline in transaction cost and accumulation of expertise in the financial and agricultural sectors. An active spot market is one of the major conditions for the success of a derivative market. This paper studies Turkey's decentralized spot agricultural markets as well as derivatives market in comparison with its international peers. Based on the outcomes of the analysis, a framework on admission to membership, product design, risk and collateral management mechanisms and quality of warehouse licensing were highlighted for consideration of commodity exchanges. Lack of price correlation between different markets for the same commodity would also contribute to the development of the commodity market. In this regard descriptive and empirical analysis via regression models were made on US and Turkey wheat and cotton markets in relation to product design and the arbitrage opportunities.

Suggested Citation

  • Necla Ilter Kucukcolak, 2019. "Evaluation of Commodity Market Experiences: More Than a Design Issue," International Journal of Economics and Financial Issues, Econjournals, vol. 9(1), pages 66-78.
    • Handle: RePEc:eco:journ1:2019-01-9
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijefi/article/download/7309/pdf
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijefi/article/view/7309/pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Keith Bollman & Philip Garcia & Sarahelen Thompson, 2003. "What Killed the Diammonium Phosphate Futures Contract?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 483-505.
    2. Donald F. Larson & Jock R. Anderson & Panos Varangis, 2004. "Policies on Managing Risk in Agricultural Markets," The World Bank Research Observer, World Bank, vol. 19(2), pages 199-230.
    3. Brorsen, B. Wade & Fofana, N'Zue F., 2001. "Success And Failure Of Agricultural Futures Contracts," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 19(2), pages 1-17.
    4. Rashid, Shahidur, 2015. "Commodity Exchanges and Market Development: What Have we Learned?," 2015 Conference, August 9-14, 2015, Milan, Italy 212488, International Association of Agricultural Economists.
    5. Hossein-Yekani, Seyed-Ali & Bakhshoodeh, Mohammad, 2006. "The importance of developing future contracts: a case study of Iran Agricultural Commodity Exchanges," MPRA Paper 29593, University Library of Munich, Germany.
    6. Coulter, J. & Onumah, G., 2002. "The role of warehouse receipt systems in enhanced commodity marketing and rural livelihoods in Africa," Food Policy, Elsevier, vol. 27(4), pages 319-337, August.
    7. Mr. Derek Anderson & Mr. Jorge I Canales Kriljenko & Mr. Paulo Drummond & Pedro Espaillat & Mr. Dirk V Muir, 2015. "Spillovers from China onto Sub-Saharan Africa: Insights from the Flexible System of Global Models (FSGM)," IMF Working Papers 2015/221, International Monetary Fund.
    8. Mattos, Fabio & Garcia, Philip, 2004. "Price Discovery In Thinly Traded Markets: Cash And Futures Relationships In Brazilian Agricultural Futures Markets," 2004 Conference, April 19-20, 2004, St. Louis, Missouri 19019, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Roche, Julian Spencer, 2020. "Success criteria for commodity exchanges," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 15(2), June.
    2. World Bank, 2005. "Managing Food Price Risks and Instability in an Environment of Market Liberalization," World Bank Publications - Reports 8264, The World Bank Group.
    3. Quintino, Derick David & David, Sergio Adriani, 2013. "Quantitative analysis of feasibility of hydrous ethanol futures contracts in Brazil," Energy Economics, Elsevier, vol. 40(C), pages 927-935.
    4. Andersson, Camilla & Bezabih, Mintewab & Mannberg, Andrea, 2017. "The Ethiopian Commodity Exchange and spatial price dispersion," Food Policy, Elsevier, vol. 66(C), pages 1-11.
    5. Kelly, Valerie A., 2005. "Farmers' Demand for Fertilizer in Sub-Saharan Africa," Staff Paper Series 11612, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    6. Byerlee, Derek & Jayne, T.S. & Myers, Robert J., 2006. "Managing food price risks and instability in a liberalizing market environment: Overview and policy options," Food Policy, Elsevier, vol. 31(4), pages 275-287, August.
    7. Ministry of Agriculture (Liberia), 2007. "Comprehensive Assessment of the Agriculture Sector in Liberia : Volume 1, Synthesis Report," World Bank Publications - Reports 7677, The World Bank Group.
    8. Neven, David & Katjiuongua, Hikuepi & Adjosoediro, Ingrid & Reardon, Thomas & Chuzu, Pia Nwanza & Tembo, Gelson & Ndiyoi, Mukelabai, 2006. "Food Sector Transformation and Standards in Zambia: Smallholder Farmer Participation and Growth in the Dairy Sector," Staff Paper Series 11701, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    9. Nygaard, Rune & Roll, Kristin H., 2024. "Cross-hedging wild salmon prices," Journal of Commodity Markets, Elsevier, vol. 33(C).
    10. Vollmer, Teresa & von Cramon-Taubadel, Stephan, 2019. "The influence of Brazilian exports on price transmission processes in the coffee sector: a Markov-switching approach," Department of Agricultural and Rural Development (DARE) Discussion Papers 291497, Georg-August-Universitaet Goettingen, Department of Agricultural Economics and Rural Development (DARE).
    11. Choudhry, Taufiq, 2009. "Short-run deviations and time-varying hedge ratios: Evidence from agricultural futures markets," International Review of Financial Analysis, Elsevier, vol. 18(1-2), pages 58-65, March.
    12. Javier E. Baez & Dorothy Kronick & Andrew D. Mason, 2013. "Rural Households in a Changing Climate," The World Bank Research Observer, World Bank, vol. 28(2), pages 267-289, August.
    13. Sitko, Nicholas J. & Jayne, T.S. & Burke, William J. & Muyanga, Milu, 2017. "Food System Transformation and Market Evolutions: An Analysis of the Rise of Large-Scale Grain Trading in Sub-Saharan Africa," Food Security International Development Working Papers 263195, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    14. Poulton, Colin & Dorward, Andrew & Kydd, Jonathan, 2010. "The Future of Small Farms: New Directions for Services, Institutions, and Intermediation," World Development, Elsevier, vol. 38(10), pages 1413-1428, October.
    15. Seyfe Fikre, 2020. "The Role and Challenge of Ethiopian Commodity Exchange (ECX) on Coffee Supplies and Marketing in Ethiopia," Business and Management Studies, Redfame publishing, vol. 6(3), pages 1-12, September.
    16. World Bank, 2020. "Agriculture Risk Financing in Southern Africa," World Bank Publications - Reports 34084, The World Bank Group.
    17. J. Alexander Nuetah & Xian Xin, 2019. "Has China’s Investment Pattern in Sub-Saharan Africa Been Driven by Natural Resource Quest?," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 11(3), pages 215-231, September.
    18. Donald F. Larson & Julian Lampietti & Christophe Gouel & Carlo Cafiero & John Roberts, 2014. "Food Security and Storage in the Middle East and North Africa," The World Bank Economic Review, World Bank, vol. 28(1), pages 48-73.
    19. Blagrave, Patrick & Vesperoni, Esteban, 2018. "The implications of China’s slowdown for international trade," Journal of Asian Economics, Elsevier, vol. 56(C), pages 36-47.
    20. Larson,Donald F. & Muraoka,Rie & Otsuka,Keijiro, 2016. "On the central role of small farms in African rural development strategies," Policy Research Working Paper Series 7710, The World Bank.

    More about this item

    Keywords

    commodity exchange; electronic warehouse receipts (EWR); commodity derivatives;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2019-01-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.