Feasibility of and steps towards the creation of a commodity exchange in Bhutan

Rutten, Lamon and Rusche, Johann (2015): Feasibility of and steps towards the creation of a commodity exchange in Bhutan.

Abstract

The report assesses whether a commodity exchange can help Bhutanese farmers, and if so, whether conditions in Bhutan allow for the creation of a successful exchange. It concludes that an exchange will reduce farmers' price risk exposure and raise their realized prices, in particular for potatoes, and recommends that a simple exchange mechanism be built around an electronic warehouse receipt system. As the size of Bhutan's economy makes a lean business model necesary for the financial viability of the commodity exchange, it is proposed that the leverages the technology and infrastructure of the Royal Stock Exchange of Bhutan.

• Item Type: MPRA Paper
• Language: English
• Keywords: commodity exchange; electronic warehouse receipts; agricultural risk management; Bhutan.
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G23 - Non-bank Financial Institutions ; Financial Instruments ; Institutional Investors; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q13 - Agricultural Markets and Marketing ; Cooperatives ; Agribusiness; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q14 - Agricultural Finance; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q18 - Agricultural Policy ; Food Policy

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