 Managing Price Risk in the Pakistan Wheat MarketRashid Faruqee, Jonathan R Coleman and Tom Scott The World Bank Economic Review, 1997, vol. 11, issue 2, 263-92 Abstract: The government intervenes in the wheat market in Pakistan to ensure food security for consumers and to provide adequate and stable incomes for producers. The cost of this intervention is high, and its impact on the performance of agriculture has been significantly negative. The World Bank is urging policy changes such as removing agricultural trade restrictions, price supports, and subsidies. However, policymakers often resist such reforms, fearing that they will expose the domestic market to fluctuating international commodity prices. This article assesses the risk management needs of the sector and evaluates whether using financial instruments--such as commodity hedging using futures, options, or swaps--would improve risk management. Simulations based on monthly data for 1994 show that market-based methods of risk management could reduce the impact of international price volatility on the domestic market without incurring high government cost or distorting price signals. Copyright 1997 by Oxford University Press. Date: 1997 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:wbecrv:v:11:y:1997:i:2:p:263-92 Ordering information: This journal article can be ordered from Access Statistics for this article The World Bank Economic Review is currently edited by Eric Edmonds and Nina Pavcnik More articles in The World Bank Economic Review from World Bank Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC. |
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