Exchange Instruments for Minimizing the Price Risks of the Agricultural Products Market

Abstract

The exchange as an element of the wholesale trade infrastructure of the agrarian market was considered: essence, functions, characteristics. The role of the Ukrainian agricultural sector in the world market is described, the factors influencing price fluctuations for agricultural products, in particular grain, are determined. In connection with the factors affecting prices, the negative impact of insufficient development of the modern exchange infrastructure of Ukraine was also considered, such as: low level of actual activity of Ukrainian commodity exchanges, lack of economic prerequisites despite the dynamics of their number, failure of exchanges to fulfill their direct functions regarding the formation of an effective agricultural products market. Deficiencies in the statistical analysis of the commodity exchange market of Ukraine were also noted, and the need to create an appropriate system for monitoring commodity exchange activity indicators was emphasized. The perspective of the positive impact of infrastructural improvements on the activation of price risk hedging in the process of exchange trading, through the significant spread of derivative exchange contracts – derivatives of various types, is considered. The characteristics of derivatives as derivative financial instruments are presented, their key characteristics are given, which allow the parties to these contracts to protect their market positions and ensure the prospect of receiving planned financial benefits in the future. The features of the futures contract, as the most promising type of derivatives and the optimal risk hedging tool for Ukrainian participants in the agricultural market, have been studied. In particular, attention is focused on the types and specifics of the manifestation of price risks, as well as the mechanisms of protection against them or minimizing the impact of such risks. The modern problems of the underdevelopment of this exchange contract in Ukraine, the reasons for their occurrence and ways to overcome them are considered. According to the results of the presentation of the main material of the study, relevant conclusions and proposals are made, promising directions for further research in this field are given.