Agricultural market dependant on future trades
In the long term, the financing and crediting of agricultural production will increasingly depend on futures trading, which determines the prices of agreements on supplies from the next harvest.
This opinion was expressed by UkrAgroConsult Director General Serhiy Feofilov, Latifundist.com reported.
«For an investor it is very important to know at what a price he could sell the future crop; for him it is important to have a reliable indicator,» the expert said.
According to him, exactly the futures markets are the indicator of prices for such agreements. Now almost all investors and market operators are guided by stock market prices in the USA and Europe, but with the development of regional markets, a significant role will be played by exchanges of the regional scale, Feofilov believes.
«Certainly, the new futures suffer from certain drawbacks — they have a too short history, problems with liquidity and the presence of customers. However, futures can improve the reliability of risk management in the development of investment strategies in the market of the Black Sea region,» the analyst stated.
As reported, the US Agency for International Development (USAID) announced the start of the project FINREP 2, the purpose of which will be help in the organisation of the agricultural futures market in Ukraine and further improvement of financial knowledge of the population.
Project FINREP 2 is designed for 5 years and provides for the implementation of a number of sub-projects totalling $12 million.