Livestock prices volatility analysis: implications for the implementation of a futures and option market in Uruguay
Current paper is intended to analyze price volatility of the livestock sector in Uruguay in order to allow both, farmers and slaughter house industry, to manage efficiently price risk fluctuations. Feasibility of future markets depends basically on the existence of a large spot market, of fluctuations on supply and demand functions, the number of participants on this market, lack of other intervention mechanisms in the livestock market that could affect market efficiency, and price volatility, Uruguay had futures market on livestock but it was unable to sustain itself because of lack of interest from the local industry as well as a poor contract design. it was analyzed the structure of the beef agro industrial chain with special interest on the market structure as well as the behavior of livestock prices during large time periods. In general terms there is no evident restrictions for the implementation of a futures and options market for livestock in Uruguay since current conditions of the spot market are sufficient. Price volatility, measured on a weekly basis, is similar to related products traded in the international market. a futures contract is proposed based on an index structure that represents accurately domestic slaughter.
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Coeditada entre Facultad de Agronomía - Udelar y el Instituto Nacional de Investigación Agropecuaria (INIA)
2004
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oai:oai.agrocienciauruguay.uy:article-10292023-12-22T17:24:59Z Livestock prices volatility analysis: implications for the implementation of a futures and option market in Uruguay Análisis de la volatilidad de los precios del ganado bovino en Uruguay: implicancias para la implementación de un mercado de futuros y opciones Gutiérrez, G. Caputi, P. futures markets livestock fesability volatilidad de precios mercados de futuros ganadería bovina factibilidad Current paper is intended to analyze price volatility of the livestock sector in Uruguay in order to allow both, farmers and slaughter house industry, to manage efficiently price risk fluctuations. Feasibility of future markets depends basically on the existence of a large spot market, of fluctuations on supply and demand functions, the number of participants on this market, lack of other intervention mechanisms in the livestock market that could affect market efficiency, and price volatility, Uruguay had futures market on livestock but it was unable to sustain itself because of lack of interest from the local industry as well as a poor contract design. it was analyzed the structure of the beef agro industrial chain with special interest on the market structure as well as the behavior of livestock prices during large time periods. In general terms there is no evident restrictions for the implementation of a futures and options market for livestock in Uruguay since current conditions of the spot market are sufficient. Price volatility, measured on a weekly basis, is similar to related products traded in the international market. a futures contract is proposed based on an index structure that represents accurately domestic slaughter. El presente trabajo busca analizar la volatilidad de los precios del ganado vacuno en Uruguay, como implicancia central para la implementación de un mercado de futuros y opciones. El objetivo de este tipo de mercados es permitir tanto a productores como industriales una forma eficiente de manejo de los riegos vinculados a las fluctuaciones de precios. La factibilidad de un mercado de este tipo depende básicamente de la existencia de un mercado disponible del producto que cumpla con ciertas condiciones de incertidumbre en lo que refiere a la oferta y demanda del producto en el tiempo, al número de agentes que participan en este mercado, existencia de un mercado libre (sin intervenciones que afecten su eficiencia) y fundamentalmente, a la volatilidad de los precios del producto. En el pasado existió en el país un mercado de futuros de novillos que finalmente fracasó debido al escaso interés por parte de la industria y a fallas en la propia estructura del contrato ofrecido. Desde el punto de vista técnico puede indicarse que no existen restricciones evidentes para la implementación de un mercado de futuros y opciones en ganado vacuno en Uruguay. La volatilidad de precios, medida sobre la base de datos semanales, es similar a la existente para mercados de futuros que operan sobre ganado vacuno de referencia a nivel internacional. Se propone desarrollar un contrato a futuro sobre un índice de precios que represente la estructura de la faena nacional. Coeditada entre Facultad de Agronomía - Udelar y el Instituto Nacional de Investigación Agropecuaria (INIA) 2004-06-01 info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion application/pdf https://agrocienciauruguay.uy/index.php/agrociencia/article/view/1029 10.31285/AGRO.08.1029 Agrociencia Uruguay; Vol. 8 No. 1 (2004); 61- 67 Agrociencia Uruguay; Vol. 8 Núm. 1 (2004); 61- 67 Agrociencia Uruguay; v. 8 n. 1 (2004); 61- 67 2730-5066 spa https://agrocienciauruguay.uy/index.php/agrociencia/article/view/1029/1117 Copyright (c) 2004 Agrociencia Uruguay http://creativecommons.org/licenses/by/4.0 |
| institution |
UDELAR |
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Uruguay |
| countrycode |
UY |
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| databasecode |
rev-agrociencia-uy |
| tag |
revista |
| region |
America del Sur |
| libraryname |
Biblioteca de la Facultad de Agronomía de la UDELAR de UY |
| language |
spa |
| format |
Digital |
| author |
Gutiérrez, G. Caputi, P. |
| spellingShingle |
Gutiérrez, G. Caputi, P. Livestock prices volatility analysis: implications for the implementation of a futures and option market in Uruguay |
| author_facet |
Gutiérrez, G. Caputi, P. |
| author_sort |
Gutiérrez, G. |
| title |
Livestock prices volatility analysis: implications for the implementation of a futures and option market in Uruguay |
| title_short |
Livestock prices volatility analysis: implications for the implementation of a futures and option market in Uruguay |
| title_full |
Livestock prices volatility analysis: implications for the implementation of a futures and option market in Uruguay |
| title_fullStr |
Livestock prices volatility analysis: implications for the implementation of a futures and option market in Uruguay |
| title_full_unstemmed |
Livestock prices volatility analysis: implications for the implementation of a futures and option market in Uruguay |
| title_sort |
livestock prices volatility analysis: implications for the implementation of a futures and option market in uruguay |
| description |
Current paper is intended to analyze price volatility of the livestock sector in Uruguay in order to allow both, farmers and slaughter house industry, to manage efficiently price risk fluctuations. Feasibility of future markets depends basically on the existence of a large spot market, of fluctuations on supply and demand functions, the number of participants on this market, lack of other intervention mechanisms in the livestock market that could affect market efficiency, and price volatility, Uruguay had futures market on livestock but it was unable to sustain itself because of lack of interest from the local industry as well as a poor contract design. it was analyzed the structure of the beef agro industrial chain with special interest on the market structure as well as the behavior of livestock prices during large time periods. In general terms there is no evident restrictions for the implementation of a futures and options market for livestock in Uruguay since current conditions of the spot market are sufficient. Price volatility, measured on a weekly basis, is similar to related products traded in the international market. a futures contract is proposed based on an index structure that represents accurately domestic slaughter. |
| publisher |
Coeditada entre Facultad de Agronomía - Udelar y el Instituto Nacional de Investigación Agropecuaria (INIA) |
| publishDate |
2004 |
| url |
https://agrocienciauruguay.uy/index.php/agrociencia/article/view/1029 |
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