Learning objectives
The course focuses on trade in ag-commodities characterised by spot markets and futures markets.
The student gains a basic understanding of these markets and operational aspects of the main types of market. It focuses on risk hedging used or that can be used by agri-food food chain operators.
Prerequisites
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Course unit content
The international agri-food market is strongly influenced by sector economic policies in individual countries and resulting from international agreements.
The course is based on the following topics:
1 Trade flows and geography
2 W.T.O. and the regulation of international trade
3 Instability of world agri-food markets
4 Supply & Demand Sheet
5 Futures contracts exchange on ag-commodities
Full programme
1. Trade flows and geography
1.1 Agricultural and agri-food products; basic and processed products
1.2 Dynamics of world agri-food trade
1.3 Export and import poles of agri-food products foreign trade
1.4 Instruments of technical and fundamental analysis;
2. W.T.O. and the regulation of international trade
2.1 Multilateral agreements
2.2 1994 GATT Agricultural Agreement
3. Instability of world agri-food markets
3.1 Demand for agri-food products (elasticity, "Engel’s law", "King effect")
3.2 Globalization and interdependence of world agri-food markets
3.3 Supply rigidity and its causes
3.4 Exogenous instability factors
3.5 EU intervention on community market of agricultural commodities
4 Supply & Demand Sheet
4.1 Aims, basic equations, rules for completion
4.2 Derivable indicators (nutrition parameters and indices for basic market analysis)
5. Futures contracts exchange on ag-commodities
5.1 "Cash", "forward" and "future" contracts
5.2 Spot transactions and “ready made” contracts
5.3 Standardization of futures contracts
5.4 Role of the broker
5.5 The Clearing House and its functions
5.6 Implicit risks in international trade transactions; speculation and hedging
5.7 Operational strategies and risk management
5.8 Elements of technical analysis applied to futures markets for agricultural commodities
Bibliography
The main readings are the lesson notes from the course and texts selected by the professor:
-Materiale didattico per il corso di Commercio internazionale dei prodotti agroalimentari, Università degli Studi di Parma, Parma, 2010.
-Introduzione all’analisi tecnica dei mercati agroalimentari, Università degli Studi di Parma, Parma, 2004.
-I mercati finanziari delle commodity agroalimentari, Università degli Studi di Parma, Parma, 2006.
All essential readings are available from the Photocopy service, Faculty of Economics (6, Via Kennedy, Parma).
Teaching methods
The course is based on frontal lessons.
Assessment methods and criteria
The exam consists of open ended written questions.
Other information
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