23 March 2012
A Position Paper on World Rice Futures
Abstract
There is a widespread belief that rice futures are not necessary for the Asian rice markets because these markets are not “broken.” In any case, it is not clear to many why a rice farmer would benefit from such a risk management tool. Some believe that futures encourage price volatility and speculation. All these concerns are valid and need to be addressed in addition to concerns about type of rice traded, financial integrity of an exchange and delivery mechanisms.
Abstract
There is a widespread belief that rice futures are not necessary for the Asian rice markets because these markets are not “broken.” In any case, it is not clear to many why a rice farmer would benefit from such a risk management tool. Some believe that futures encourage price volatility and speculation. All these concerns are valid and need to be addressed in addition to concerns about type of rice traded, financial integrity of an exchange and delivery mechanisms.
