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Explaining the role of commodity traders: A theoretical approach


  • Raphaël Chiappini

    (LAREFI, University of Bordeaux)

  • Yves Jégourel

    (LARFI, University of Bordeaux and Policy Center for the New South)


Empirical models of international commodity trade ows tend to show that exchange rate volatility has either no or negative impact on export volumes. This analysis has a number of limitations. In particular, it underestimates the role of physical traders and, consequently, the importance of future markets. In this context, this article aims to provide the theoretical underpinnings to demonstrate that these traders play a very particular role and that they have an influence on the reality of export flows due to their use of future contracts. Using a very simple cobweb model, we demonstrate that exchange rate uncertainty fuel commodities' exports while futures market volatility could have a positive impact on the level of exports.

Suggested Citation

  • Raphaël Chiappini & Yves Jégourel, 2019. "Explaining the role of commodity traders: A theoretical approach," Economics Bulletin, AccessEcon, vol. 39(3), pages 2002-2013.
  • Handle: RePEc:ebl:ecbull:eb-18-00771

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    References listed on IDEAS

    1. Sophie Mitra & Jean‐Marc Boussard, 2012. "A simple model of endogenous agricultural commodity price fluctuations with storage," Agricultural Economics, International Association of Agricultural Economists, vol. 43(1), pages 1-15, January.
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    More about this item


    Exports; exchange rate; futures prices; storage; physical trader;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture


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