Tactical Warning :Agriculture Price Risk Management
French President Nicolas Sarkozy at the G20 agriculture ministers told : “A market that is not regulated is not a market but a lottery“.
We agree on it.
France is leading the call for tougher limits on speculation in food commodities, but the UK is taking a more cautious approach.
The meeting comes after the World Bank unveiled a new measure to provide protection from volatile food prices in developing countries.
This measure is a new risk management tool for the developing nations called the Agriculture Price Risk Management ,(APRM),that will will allow better access to hedging, and thus shield consumers and producers of agricultural commodities from price volatility.
According to the WB It will protect buyers from price rises in food-related commodities such as wheat, sugar, cocoa, milk, live cattle, corn, soybean, and rice.
According to the WB President Robert Zoellick “With this new tool, we can help farmers, food producers, and consumers protect themselves against price swings, strengthen their credit position, and increase their access to finance …This tool shows what sensible financial engineering can do: make lives better for the poor” . Then Mr Zoellick said volatile food prices “the single gravest threat” the developing nations were facing…People are hungry for food and for action on a global level”.
The World Bank says that since June last year, rising and volatile food prices have led to an estimated 44 million more people living in poverty, under $1.25 (£0.77) a day.
Investment Risk management : dou you have any idea how the APRM works ? If not or if you are not so sure it is better that you RETHINK to all forecasts about gains to keep them realistic under the new due conditions.
( Editorial Note : If you want to be informed about the financial markets please read the indeces at http://prosumerzen.net/world-financial-indeces/)