Possibilities for Joint Commodity Futures Market in Eastern Europe

Kovačević, Vlado and Kuzman, Boris and Damnjanović, Jelena (2017) Possibilities for Joint Commodity Futures Market in Eastern Europe. Economic Insights – Trends and Challenges, VI (4). pp. 37-41. ISSN 2284-8576

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Abstract

The aim of this paper is to analyse possibilities and effects of joint futures market for Eastern European countries Romania, Hungary, Bulgaria and Serbia. Developed futures market is of importance for agricultural sector because of possibilities to use hedging strategies. Volatility of grain prices in recent years is driving force for development of futures market worldwide. Most developed commodity derivatives are futures and option contracts. In the USA this market is highly developed, while in the EU, and especially in the Eastern Europe this market is not fully developed. According to the analyses in this paper the main reason of underdevelopment of grain future contracts in Eastern Europe is low volume of trade. As the main preconditions for functioning of grain future market is liquidity the assumption is that the joint market in Black sea region will provide sufficient liquidity and provide sustainable futures market.

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