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

Anna Olszańska 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
FIG.3: Weekly changes in market prices of fodder corn in 2004-2008. (zł/t)
zł/t900
800
700
600
500
400
300
X
XI
2004/2005 2005/2006 2006/2007 2007/2008
XII
I
II
III
Source: own study on the basis of statistical data [5]
IV
V
VI
VII
VIII
IX
months
When analysing the presented data, a number of detailed conclusions can be formulated,
which indicate the need of using various protective mechanisms on a larger scale.
In the investigated years, market prices of all analysed grains underwent considerable
changes. Generally, in 2004/2005 and 2005/2006, a much lower level of these prices
was recorded as compared with the farming year 2006/2007. In 2007/2008, prices of
grain were even higher than in the previous year. The data coming after the harvests in
2008 indicate that in the current farming year these prices will undergo a considerable
decrease. So, this is a considerably unstable market, which is characterized by high
variation in prices in subsequent years. In this case, in order to reduce the price risk,
intervention mechanisms available within CAP should be used, but such price
fluctuations can also be considerably reduced by using mechanisms of horizontal and
vertical integration. Diversification of production within a farmstead can also be helpful
here to a certain degree. Large commodity exchanges also keep futures contracts for a
time perspective longer than one farming year.
From the viewpoint of both grain producers and entities purchasing and processing
grains, variation in prices at the scale of a year is also important. That’s because the fact
that at a large scale of price fluctuations, a much higher profit on sales can be obtained
or raw materials can be purchased at much better prices than expected. However, an
opposite situation is also possible – that is, sales with a loss or purchase of raw materials
at prices that have considerable impact on a decrease in profitability of processing. It
should be noted that in subsequent years, the situation in the analysed grain markets was
much differentiated. Both the scale of price changes and the time of such changes were
difficult to predict. In the analysed years, prices in the market of wheat for human
consumption varied from PLN 352 to PLN 950 per tonne, and in subsequent years, the
course of these changes was very different. The coefficient of variation calculated for
the year 2005/2006 was 6.57%, for 2006/2007 – 10.26%, and for 2007/2008 – 9.83%.
In the market of fodder barley, prices varied from PLN 299/t to PLN 856/t, while the
coefficients of variation for subsequent years were 4.77%, 15.82%, 10.13%,
respectively. In the market of fodder corn, average weekly prices varied from PLN 370/t
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