Agricultural derivative markets

In the preceding chapters, we examined the economic fundamentals of the key agricultural commodities (thereafter abbreviated to ags) and analysed how demand and supply drivers interact to reach equilibrium in terms of the quantity consumed and the price paid for each commodity. We also considered the various pricing regimes for different commodities and alluded to the fact that agricultural commodity prices may change rapidly and often exhibit considerable volatility, especially due to weather effects that give rise to very variable crops from one year to the next.