ISSN 2375-0693
African Journal of Agricultural Economics and Rural Development ISSN 2375-0693 Vol. 8 (1), pp. 001-007, January, 2020. © International Scholars Journals
Full Length Research Paper
The choice of feasible commodities for futures trading: A study of Iranian agricultural commodities
Seyed-Ali Hosseini-Yekani1*, Mansour Zibaei1 and David E. Allen2
1Department of Agricultural Economics, Shiraz University, Iran.
2School of Accounting, Finance and Economics, Edith Cowan University, Australia.
Accepted 22 October, 2019
Abstract
In this paper an attempt is made to determine the most suitable agricultural commodities to be adopted for establishing a futures market in Iran. Two different approaches are adopted: the first involves identifying factors that contribute significantly to the success or failure of existing agricultural commodities futures contracts in established futures markets. The second involves simulating the hedging performance of potential commodities to determine the optimum contract choice. The results suggest that saffron, pistachios and rice are the three most feasible commodities to be adopted in order to establish commodity futures trading in Iran.
Key words: Agricultural futures contracts, commodity specifications, hedging performance, Iran.