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Commodity Exchanges and Market Development: What Have we Learned?

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  • Rashid, Shahidur

Abstract

Improving price discovery, linking smallholders to markets, reducing transactions costs, and increasing agricultural export earnings are some of the popular claims about benefits of Agricultural Commodity Exchanges (ACX) in developing countries. Based on the case studies, and a review of available literature, this paper examines the validity of these popular claims and associated public policies. Our analysis suggests that most of these popular claims cannot be supported by empirical evidence. While agricultural commodity exchanges have been successful in emerging countries, they have either failed or remain in operation with government or donor supports. Underlying reasons for the failures, considerations for future investments in such institutions, and implications for alternatives to centralized exchanges are discussed.

Suggested Citation

  • Rashid, Shahidur, 2015. "Commodity Exchanges and Market Development: What Have we Learned?," 2015 Conference, August 9-14, 2015, Milan, Italy 212488, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:212488
    DOI: 10.22004/ag.econ.212488
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    References listed on IDEAS

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    1. Keith Bollman & Philip Garcia & Sarahelen Thompson, 2003. "What Killed the Diammonium Phosphate Futures Contract?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 483-505.
    2. Philip Garcia, 2004. "A selected review of agricultural commodity futures and options markets," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 31(3), pages 235-272, September.
    3. C. L. Gilbert, 2009. "Cocoa Market Liberalization in Retrospect," Review of Business and Economic Literature, Intersentia, vol. 0(3), pages 294-313, September.
    4. Christopher L. Gilbert, 2009. "Cocoa Market Liberalization in Retrospect," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(3), pages 294-312.
    5. C.L. Gilbert, 2009. "Cocoa Market Liberalization in Retrospect," Review of Business and Economic Literature, Intersentia, vol. 54(3), pages 294-313, September.
    6. Telser, Lester G, 1981. "Why There Are Organized Futures Markets," Journal of Law and Economics, University of Chicago Press, vol. 24(1), pages 1-22, April.
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    Cited by:

    1. Necla Ilter Kucukcolak, 2019. "Evaluation of Commodity Market Experiences: More Than a Design Issue," International Journal of Economics and Financial Issues, Econjournals, vol. 9(1), pages 66-78.
    2. Seyfe Fikre, 2020. "The Role and Challenge of Ethiopian Commodity Exchange (ECX) on Coffee Supplies and Marketing in Ethiopia," Business and Management Studies, Redfame publishing, vol. 6(3), pages 1-12, September.
    3. Boyd, Chris M., 2020. "Urgent Yet Ineffective? The Welfare Impacts of Potato Price Stabilization in Peru," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304293, Agricultural and Applied Economics Association.
    4. Huda, Md Nazmul & Hossain, Sayed Mohammad Athar & Shaturaev, Jakhongir, 2023. "Effect of Commodity Exchange on the Economy- Prospects and Challenges," MPRA Paper 118331, University Library of Munich, Germany, revised 14 Mar 2023.
    5. Roche, Julian Spencer, 2020. "Success criteria for commodity exchanges," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 15(2), June.

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