| Registro completo |
| Provedor de dados: |
AgEcon
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| País: |
United States
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| Título: |
PRICE RISK MANAGEMENT STRATEGIES FOR GRAIN IMPORTERS
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| Autores: |
Wilson, William W.
Wagner, Robert
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| Data: |
2002-12-10
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| Ano: |
2002
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| Palavras-chave: |
Price risk uncertainty
Hedging
Grain
Importers
International Relations/Trade
Risk and Uncertainty
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| Resumo: |
The presence of multiple sources of uncertainty complicates hedging decisions. One of these is the output price and its correlation with input prices. The other is how far forward a firm covers its positions. This study analyzes hedging strategies for grain importers as processors. The analytical model addresses questions of the hedge horizon and accounts for the correlation between input and output prices and exchange rate risk. A theoretical model was developed explicitly modeling the operations of a grain importing firm. The concept of strategic demand for hedging was developed in the context of an analytical model, representing the adjustment in hedge ratios in relation to the hedge horizon and input-output price correlations. Results indicated that the hedging demand diminishes as the time horizon increases, that input-output price correlations have an important impact on hedging, as does the exchange rate. The model also illustrated the impact of price controls and/or output contracting on risk exposure and the demand for hedging.
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| Tipo: |
Working or Discussion Paper
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| Idioma: |
Inglês
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| Identificador: |
6538
http://purl.umn.edu/23665
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| Editor: |
AgEcon Search
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| Relação: |
North Dakota State University>Department of Agribusiness and Applied Economics>Staff Papers
Staff Paper No. AAE 02004
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| Formato: |
19
application/pdf
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