MEETING THE CHALLENGES
Trading Thailand's agricultural commodities
Thailand holds the enviable position of being one of the richest agricultural producers in the world, a major player in rubber, rice, tapioca, chicken, frozen shrimp, fish, fruit, sugar, vegetables and corn. So how can we capitalise on this natural compet
One useful step would be to establish Thailand as a global trading centre of agricultural products through an efficient commodities exchange, buying and selling major products. This would smooth out fluctuations in price, benefiting farmers, buyers and consumers.
To understand how this might work, imagine a farmer with a ripening field of corn. Even though he seems set for a bumper crop, his future is uncertain _there might be freak storms, insect attacks or a collapse in prices. It is impossible to protect against all these risks but he can protect himself against falling prices by buying futures in the commodities he produces. If the market price does drop, the fall in his profits when he sells his produce will be offset by the profit he gains when he collects on his commodities future option.
Although this is hard to imagine in Thailand with our small scale farms, the agriculture business is very different in countries such as the United States where everything is on a larger scale.
This article is older than 60 days, which we reserve for our premium members only.You can subscribe to our premium member subscription, here.
About the author
- Writer: Bangkok Bank
Latest stories in this category:
- Greece faces bailout showdown
- Gold prices for Saturday
- Kasikorn makes global bet with Macquarie
- Thai offices abroad told to go on the offensive
- PTTEP Bongkot South project moves ahead of schedule
- Amlo: Thailand facing international blacklist
- Country Group tethers promotion plans
- Shell shells out B1bn for pump project
