 RISK MANAGEMENT CHALLENGES IN THE GRAIN PROCESSING INDUSTRYPlamen Penev ()
Conference of the Department of Agricultural Economics, at the University of Economics - Varna, 2024, issue 1, 225-232 Abstract: Grain processors face price risk management issues that are slightly different from the traditional hedging objectives. This study examines two aspects of the problem. The first is the industry-specific correlation between input and output prices. These could be rather firmly correlated in certain occasions and significantly less in other circumstances. The second is the hedge horizon, or the timespan ahead that a company must offset its impending short cash positions. The processing margins could be effectively hedged when there is a presence of strong correlation between input and output prices. Hedging strategies, however, might be impinged if the correlation is weak and/or if the hedge horizon period is longer. The purpose of the report is to highlight the key factors that grain processor must take into consideration when shaping their risk management approach. Keywords: grain processors; correlation; prices; risk (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:vrn:cfabre:y:2024:i:1:p:225-232 Access Statistics for this article More articles in Conference of the Department of Agricultural Economics, at the University of Economics - Varna from Publishing house "Science and Economics" Varna Contact information at EDIRC. |
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