Use of hedging instruments on example of grain market
2021
Abuselidze, G., Batumi Shota Rustaveli State Univ. (Georgia)
The article proves that the discrepancy of regulatory mechanisms of market relations subjects is also typical for the agricultural sector of the economy of Georgia. The problem of price formation for agricultural products is particularly acute. The research determines the need for a scientific approach to solving the issues of improving the domestic commodity market in order to ensure its adequacy for full-scale integration into the world economic space. The theoretical and methodological basis of the research is a systematic approach to the study of the fundamental provisions of the economic theory, risk management theory regarding the problems of using exchange instruments in the agricultural market of Georgia in order to minimize the risks of agricultural products. The authors have identified the main tools for protection against price fluctuations in the exchange agricultural corn market, analysed the ways to use hedging to minimize risks. The main tools of protection against price fluctuations in the exchange-traded agricultural corn market are highlighted, and the ways of using hedging to minimize risks are analysed. Since seasonality, fluctuations in production volumes, and natural and climatic conditions have a great influence on the formation of prices for agricultural products, the combined impact of these factors increases the risks of agricultural business, overcoming their negative impact on business activities in agriculture and determines the need to apply progressive elements of market regulation, including hedging tools. .
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