Price Risk Management
Printer-friendly versionVietnam Coffee Supply Chain Risk Assessment: Draft Report
With annual exports of around one million tons, worth USD 1.7 billion and representing approximately 14% of global coffee production in 2010, Vietnam today ranks as the world‟s second largest coffee producer. Since 1999, the country has been the world‟s largest exporter of Robusta coffee with approximately 500,000 rural households deriving most of their farming income from coffee production. 1 The sector is characterized by an extremely competitive environment with growers receiving around 95% of the FOB value.
Type of Risk:
All
Type of Risk management option:
All
Organization:
The World Bank
Publication Date:
2011
Number of Pages:
47
Language:
English
Region:
East Asia and Pacific
Country:
Vietnam 
MFARM Ltd, Kenya
Image:
Organization’s Acronym:
MFARM
Web Address:
http://www.mfarm.co.ke
Address:
Bishop Mague Centre,Opp. Uchumi Hyper Ng'ong rd. Nairobi
Country:
Kenya
Areas of Work:
Price risk management Brief summary of organization’s risk management work:
MFarm Ltd is a software solution and agribusiness company. Our main product M-Farm, is a transparency tool for Kenyan farmers where they simply SMS the number 20255 (Safaricom Users) to get information pertaining to the retail price of their products, buy their farm inputs directly from manufacturers at favorable prices, and find buyers for their produce.
Our product, M-Farm, works as a transparency tool for farmers. M-Farm was launched after winning the IPO48 competition — a 48 hour boot-camp event aimed at giving web/mobile start-ups a platform to launch their start-ups.Of the 37 initial ideas, M-Farm took away the €10,000 prize as capital investment.
What we do
- Enable farmers to inquire current market prices of different crops from different regions and/or specific markets.
- Aggregate farmers needs/orders and connect them with farm input suppliers.
- Enable farmers to sell collectively and connect them with a ready market.
Contact information to be listed with profile:
+254 707 933 993
Email address:
[email protected] Managing Commodity Price Risks: A Technical Overview
Managing risks in highly volatile commodity markets remains one of the major challenges of development, especially for the poorest countries. During 1983-2003, prices of many commodities fluctuated from below 50 percent to above 150 percent of their average prices. More than 50 developing countries depend on three or fewer leading commodities for more than one half of their export earnings. In Africa, commodities account for about three quarters of total merchandise exports.
Type of Risk:
Market-related risks
Type of Risk management option:
Risk Reduction/Mitigation
Organization:
The World Bank
Publication Date:
2005
Number of Pages:
27
Language:
English
Region:
Global Commodities Exchange: Options for Addressing Price Risk and Price Volatility in Rice
In this paper, Framroze Pochara, a capital markets veteran with over 25 years of experience in the industry, takes off from the differing views of two prominent authorities about rice futures in the Association of Southeast Nations (ASEAN) and tackles various options at the country and regional levels to foster price discovery and price risk management.
Type of Risk:
Market-related risks
Type of Risk management option:
Risk Reduction/Mitigation
Organization:
Asian Development Bank (ADB)
Publication Date:
2012
Online Location:
http://www.adb.org/publications/commodities-exchange-options-addressing-price-ri...
Number of Pages:
20
Language:
English
Region:
East Asia and Pacific - Briefing Paper or Note
- Futures
- Options
- Price Risk Management
- Price Volatility
- rice in Asia
- rice market
- rice price
- rice trading
Price and Volatility Trends in Global and Local Context
This presentation was made at the Convening on Price Risk Transfer Tools for Poor Farmers in Africa event at Oxfam America on January 13-14, 2011 and discusses commodity pric e movements at the global level, as well as the domestic level.
Type of Risk:
Market-related risks
Type of Risk management option:
Risk Transfer
Organization:
The World Bank
Publication Date:
2011
Number of Pages:
14
Language:
English
Region:
Global Agricultural Risk Management Team | The World Bank
Organization’s Acronym:
ARMT
Web Address:
http://www.worldbank.org/agrm
Address:
1818 H Street NW
Washington, DC 20433
Country:
United States
Areas of Work:
Insurance/re-insurance
Areas of Work:
Capacity building/training/research
Areas of Work:
Risk assessment
Areas of Work:
Price risk management
Areas of Work:
Weather risk management
Areas of Work:
Other Brief summary of organization’s risk management work:
The World Bank assists clients to develop and apply more effective and sustainable strategies for managing agricultural risks through investment lending and technical assistance involving (i) physical infrastructure (e.g., irrigation and drainage facilities); (ii) technology development and transfer (e.g., improved crop varieties and animal breeds); (iii) improved management practices (e.g., integrated pest management, quality control); (iv) financial instruments (e.g., insurance, savings; inventory credit; catastrophe bonds); and /or (v) public programs (e.g., safety nets). This work is undertaken across the World Bank’s Sustainable Development Network, within several financial sector units and the International Finance Corporation.
Under the program led by the Agricultural Risk Management Team (ARMT), with financial support of the European Union and the Swiss and Dutch Governments, particular emphasis has been placed on supporting market-based risk management approaches and supporting broader applications of agronomic, weather, and price data for ex ante risk management. This program involves technical assistance in identifying and quantifying risks in agriculture and agricultural supply chains, and advisory services and training on alternative risk management approaches and instruments. The World Bank’s support for agricultural risk management is normally provided in conjunction with other development partners, including bilateral and multilateral agencies, regional technical organizations, research and training centers, NGOs, and others.
The Agricultural Risk Management Team (formerly known as the Commodity Risk Management Group—CRMG) is part of the World Bank's Agriculture and Rural Development Department (ARD).
Contact information to be listed with profile:
- Bilateral/multi-lateral
- Capacity Building
- Capacity Transfer
- Holistic approach
- Market
- planning
- Price Risk Management
- Risk management assessments
- Strategy
- Supply chain assessment
- Training
- Weather Risk Management
South African Futures Exchange
Organization’s Acronym:
SAFEX
Address:
One Exchange Square, Gwen Lane,
Sandown, 2196
Private Bag X991174
Sandton, 2146
Republic of South Africa
Country:
South Africa
Areas of Work:
Price risk management Brief summary of organization’s risk management work:
The SAFEX Commodity Derivatives Market provides a platform for price discovery and efficient price risk management for the grains market in South and Southern Africa. More recently, the Division also offers derivatives on precious metals and crude oil.
Commodity markets have existed for many centuries and were the first to innovate contracts in which to manage price risk. The use of derivative instruments through futures and options contracts, provide market participants with the ability to manage their price risk in the underlying physical market. By trading on a formal exchange which connects buyers and sellers, not only is price discovery achieved in a transparent fashion, but all transactions are guaranteed through the derivatives clearing structure.
Producers and users of agricultural commodities who hedge their price risk are thereby limiting their exposure to adverse price movements. This encourages increased productivity in the agricultural sector as farmers and users are able to concentrate their efforts on managing production risks. Production risks associated with variables such as the weather, farm/production management and seasonal conditions.
The physically settled commodities rely on warehouse receipts to facilitate the delivery process. The warehouse receipts are utilized by financial institutions who offer financing to clients who own the receipts. Derivative contracts also enable institutions to fund input costs to producers who hedge their price risk and in so doing encourage sustainable production.
Contact information to be listed with profile:
http://www.jse.co.za/Home/ContactTheJSE.aspx
+27 11 520-7000
Email address:
[email protected] - Agri-business (regional/international)
- Derivatives
- Futures
- grains market
- hedge
- Market
- Price Risk Management
- South Africa
- Southern Africa
- Trade
AFGRI
Web Address:
http://www.afgri-ir.co.za/Default.php
Address:
AFGRI Building
1st Floor
267 West Avenue
Country:
South Africa
Areas of Work:
Price risk management Brief summary of organization’s risk management work:
As a transforming force in the business of agriculture, AFGRI offers a wide range of services, skills and expertise. Focusing on product development and specialised services, AFGRI Operations prides itself on its integrated approach to market needs, with the customer's profitability a priority.
With procurement personnel stationed Nationwide and its offices in Zambia, AFGRI Trading offers producers a wide range of structured products on an ongoing basis, including:
Procurement of physical commodities (white and yellow maize, sunflower seed, soya beans, wheat, sorghum and barley) from farmers on a pre-negotiated contract basis, making use of any or all of the following:
• Hedging of commodities on the SA Futures Exchange (SAFEX)
• Fixed price contracts
• Minimum price contracts
• Maximum price contracts and
• Deferred price contracts
Procurement of physical commodities (white and yellow maize, sunflower seed, soya beans, wheat, sorghum and barley) from farmers on a pre-negotiated contract basis, making use of any or all of the following:
• Hedging of commodities on the SA Futures Exchange (SAFEX)
• Fixed price contracts
• Minimum price contracts
• Maximum price contracts and
• Deferred price contracts
Risk management services include:
• Price risk management through various term and option contracts
• Low hedging costs on both National and International markets
• Effective SAFEX broker services at competitive rates, together with market related updates (Local and International supply and demand figures; MTM each day; weather and other related information)
• Price risk management through various term and option contracts
• Low hedging costs on both National and International markets
• Effective SAFEX broker services at competitive rates, together with market related updates (Local and International supply and demand figures; MTM each day; weather and other related information)
Contact information to be listed with profile:
http://www.afgri-ir.co.za/explore_contact.htm
Email address:
[email protected] - Agri-business (regional/international)
- agri-services
- financial services
- food
- logistics
- Price Risk Management
- producer services
Cargill Risk Management
Web Address:
http://www.commoditypricerisk.com/
Country:
United States
Areas of Work:
Price risk management Brief summary of organization’s risk management work:
Since 1994, Cargill Risk Management has helped businesses identify their price risk management issues and created tailored risk management products that will mitigate price exposures and protect operating margins. Cargill Risk Management strives to fully meet the risk management needs of its customers and has assembled three teams that focus on a specific customer segment:
- Hedging Products tailors products to meet the needs of commercial institutions.
- Investor Products provides private investors, large hedge and pension funds market expertise and investment alternatives.
- Producer Products focuses on providing farmers and livestock producers with unique hedging and marketing alternatives.
Contact information to be listed with profile:
http://www.commoditypricerisk.com/contact.htm
- Agri-business (regional/international)
- hedge
- hedging
- investor
- Price Risk Management
- producer products
The International Task Force on Commodity Risk Management in Developing Countries: Activities, Findings and the Way Forward
The objective of the report is to review the set of on-going operations implemented by the International Task Force on Commodity Risk Management, led by the World Bank by summarizing their goals, activities, and initial lessons learned. This document provides an overview of commodity risk management, including micro- and meso-level weather risk management, micro- and meso-level commodity price risk management, macro-level risk management and provides some notes on risk management training and capacity building.
Type of Risk:
All
Type of Risk management option:
Risk Transfer
Organization:
The World Bank
Publication Date:
2008
Online Location:
http://siteresources.worldbank.org/INTCOMRISMAN/Resources/ITF.pdf
Number of Pages:
57
Language:
English
Country:
Global
Document:
- Cotton
- Flood
- Index-Based Weather Risk Management
- Insurance
- Price Risk Management
- Risk Management Training
- Study/Report
- Supply Chain Risk Assessment
- Weather