[Edit]Regulation of commodity markets

In the United States, the principal regulator of commodity and futures markets is the Commodity Futures Trading Commission but it is the National Futures Association that enforces rules and regulations put forth by the CFTC.

[Edit]Commodity markets and protectionism

Developing countries (democratic or not) have been moved to harden their currencies, accept International Monetary Fund rules, join the World Trade Organization (WTO), and submit to a broad regime of reforms that amount to a hedge against being isolated. China's entry into the WTO signalled the end of truly isolated nations entirely managing their own currency and affairs. The need for stable currency and predictable clearing and rules-based handling of trade disputes, has led to a global trade hegemony - many nations hedging on a global scale against each other's anticipated protectionism, were they to fail to join the WTO.

Commodity as a new asset class for pension funds and swFs

In order to further diversify their investments and mitigate the risks associated with inflationary debasement of currencies, an increasing number of pension funds and sovereign wealth funds are allocating more capital to real assets such as a commodities and commodity-related infrastructure.^[2] Think-tanks such as the World Pensions Council (WPC) have argued that, unlike previous recessionary cycles, commodity prices could remain durably at relatively high levels as Gulf Arab, Latin American and Asian governments are less inclined to accommodate G7 nations on the supply front.^[3]

________________________ Бордаева Джиргал, Бордаева Атина

[Edit]Oil

Building on the infrastructure and credit and settlement networks established for food and precious metals, many such markets have proliferated drastically in the late 20th century. Oil was the first form of energy so widely traded, and the fluctuations in the oil markets are of particular political interest.

Some commodity market speculation is directly related to the stability of certain states, e.g., during the Persian Gulf War, speculation on the survival of the regime of Saddam Hussein in Iraq. Similar political stability concerns have from time to time driven the price of oil.

The oil market is an exception. Most markets are not so tied to the politics of volatile regions - even natural gas tends to be more stable, as it is not traded across oceans by tanker as extensively.

__________________________ Метелицина Мария, Титова Екатерина

7. Управление рисками на товарных рынках Commodity risk

Commodity risk refers to the uncertainties of future market values and of the size of the future income, caused by the fluctuation in the prices of commodities.^[1] These commodities may be grains, metals, gas, electricity etc. A commodity enterprise needs to deal with the following kinds of risks:

• Price risk (Risk arising out of adverse movements in the world prices, exchange rates, basis between local and world prices)

• Quantity risk

• Cost risk (Input price risk)

• Political risk

[Edit]Groups at Risk

There are broadly four categories of agents who face the commodities risk:

• Producers (farmers, plantation companies, and mining companies) face price risk, cost risk (on the prices of their inputs) and quantity risk

• Buyers (cooperatives, commercial traders and trait ants) face price risk between the time of up-country purchase buying and sale, typically at the port, to an exporter.

• Exporters face the same risk between purchase at the port and sale in the destination market; and may also face political risks with regard to export licenses or foreign exchange conversion.

• Governments face price and quantity risk with regard to tax revenues, particularly where tax rates rise as commodity prices rise (generally the case with metals and energy exports) or if support or other payments depend on the level of commodity prices.