DIE VERMINDERING VAN MARKRISIKO IN 'N VRYE LANDBOU MARKSTELSEL (SONDER STAATSINMENGING)

Konrad Keyser

Agrekon, 1991, vol. 30, issue 4

Abstract: The Government gives a clear indication with their present subsidy policy of a withdrawal out of agriculture and wants supply and demand to play a bigger role in the determining of prices. Maize and wheat are examples of the implementing of this policy. GATT members are currently liberalising world agriculture to get it on more common ground. SA will in future be more exposed to international trade and big price fluctuations. The suspension of sanctions will also contribute to this. The uncertainty of the SA climate imply a bigger dependence on international trade through either imports or exports. Against this background the need for for a decrease in price risk originates. With this risk there is also a dependence on exchange rate fluctuations. Institutions like the Maize Board are using hedging methods on the Chicago Board of Trade to reduce the risk of international price fluctuations. Exchange rate covering is also used to reduce risk of exchange rate fluctuations. This action could be taken on both imports and exports. This paper explains how industries, organisations and individuals can use hedging as a method of reducing the risk of price and exchange rate fluctuations.

Keywords: Agricultural and Food Policy; Marketing; Risk and Uncertainty (search for similar items in EconPapers)
Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:ags:agreko:267497

DOI: 10.22004/ag.econ.267497

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