Managing commodity price risks: The cases of cotton in Burkina Faso and Mozambique and coffee in Ethiopia

Cornelia Staritz, Bernhard Tröster and Karin Küblböck

No 16/2015, Policy Notes from Austrian Foundation for Development Research (ÖFSE)

Abstract: Price instability is a major concern for commodity producers in developing countries. Commodity derivative markets have become the central pricing mechanism for international commodity trade. This is problematic given the high volatility and increased short-termism of these markets in the context of financialisation. The effects on producers depend on the market structure in producer countries. Burkina Faso and Mozambique have different types of national cotton price stabilization schemes in place while global coffee price fluctuations are transmitted directly to producers in Ethiopia. Policy reforms are required at two fronts - on commodity derivative markets to reduce excessive speculation and stabilize commodity prices and in producer countries to ensure fair and stable prices for producers.

Date: 2015
New Economics Papers: this item is included in nep-afr and nep-agr
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:oefsep:162015

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