Put option contracts: analysis of the price support potential in the rice market / Contratos de opção: análise do potencial de sustentação de preços para o mercado de arroz

AUTOR(ES)
DATA DE PUBLICAÇÃO

2006

RESUMO

An economic model was developed to analyze the put option contract role to stabilize prices in the paddy market. The possibility of using Federal Government Acquisitions (AGF) to complement the option instrument was considered. The role of the options was to reduce the risks of storing the product for later sale. The model is applied to analyze the option instrument implementation in the 2004/05 season. A two week demand for rice was estimated for the Brazilian market. The results show that the market prices go up when the government acts through the AGF. The options serve the purpose of making prices follow a compatible path. It was estimated that the probability for the option owners exercise their options is greater when the AGF are not used. One can conclude that these two tools (AGF and put options) can be used in a complementary way, with the AGF raising the market prices in the harvesting period, and the put option contracts making sure that the prices follow a competitive path and reduce the risks of future prices.

ASSUNTO(S)

armazenamento agrícola acquisition rice agricultural policy aquisição arroz agricultural storing política agrícola agricultural market mercado agrícola

ACESSO AO ARTIGO

Documentos Relacionados