The potential use of derivatives to manage the price risk of seafood markets: the case of sole and cuttlefish in France

Bégué-Turon, Jean-Loïc and Perraudeau, Yves and Rautureau, Nicolas (2006): The potential use of derivatives to manage the price risk of seafood markets: the case of sole and cuttlefish in France.

Abstract

Taking into consideration the changes in the rules for the price support for agricultural and sea products, it seems appropriate to find out what other means could be used to cover the price risk in order to protect the commercial margin of these sectors of activity. The use of derivatives tools helps achieve this objective. We first emphasize the interest of such a study for fresh seafood markets and make a brief presentation of the various tools available to facilitate the understanding of future choices. Then we conduct a statistical analysis concerning the common sole and cuttlefish French markets which shows a good correlation level between sizes, presentations, qualities and the possibility to launch indices by species and OTC optional transactions on them. The last section brings into perspective the results and points out the various steps to take to make it functional.

• Item Type: MPRA Paper
• Language: English
• Keywords: Cuttlefish; Derivative instruments; Price risk management; Sole
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products; G - Financial Economics > G1 - General Financial Markets > G19 - Other; 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 > Q2 - Renewable Resources and Conservation > Q22 - Fishery ; Aquaculture