Sborník 2009 díl 2. - Fakulta informatiky a managementu - Univerzita ...

POSSIBILITIES OF REDUCING THE PRICE RISK CONNECTED WITH
TRANSACTIONS IN AGRICULTURAL AND FOOD PRODUCTS IN
DOMESTIC AND INTERNATIONAL MARKETS ON THE EXAMPLE OF
GRAIN MARKET
Anna Olszańska
University of Economics Wroclaw
anna.olszanska@ae.wroc.pl
Keywords:
The price risk – hedging transactions – grain market
Abstract:
The purpose of this study is to indicate and assess the possibilities of decreasing the
price risk related to domestic and international transactions in agricultural and food
products. The agricultural and food production, unlike any other sphere of business
activity, is burdened with various types of risk elements. Along with development of
economy, there appear new instruments limiting this risk. From among them, there can
be mentioned market regulation instruments applied by the State and those that can be
used by individual entrepreneurs.
Introduction
Conducting a business activity in the environment of more and more competitive
economy imposes an increase in concentration and specialization of production and thus
an increase in the production scale and value of individual product sales transactions.
On the other hand, an increase in the scale of individual transactions causes that the
related risk also increases. This risk was considerably increased upon Poland’s
accession to the EU common market. At the same time, it should be noticed that CAP
mechanisms have an effect on limiting the price fluctuations with respect to agricultural
and food products, but they do not eliminate them completely. Entities dealing with
production and trade in agricultural and food products are more and more aware of the
existing risk, but they are also aware of the existence of various mechanisms limiting
the risk.
The purpose of this study is to indicate and assess the possibilities of decreasing the
price risk related to domestic and international transactions in agricultural and food
products.
Types of the risk related to agricultural and food production – potential
possibilities of limiting it
The agricultural and food production, unlike any other sphere of business activity, is
burdened with various types of risk elements. The risk is inseparably connected with
activity in agro-business, and it results, first of all, from uncertainty as to conditions of
economy and a lack of possibility to determining its future conditions. Within the risk
121