MARKET OF FINANCIAL SERVICES

ZAGURSKYI Oleg ¹

¹State Educational and Research Organization “Academy of Financial Management”

Problems and prospects of an exchange activity in agrarian sector of the economy

Existing gaps in the institutional environment and the institutions that structure interactions impede the problem of realization of agriculture production. Development of the agricultural sector is not possible without implementation of effective institutions of agricultural market as commodity exchanges. They are indicators of market prices for agricultural products and agricultural raw materials, make possible transaction between business entities based on ratios of actual supply and demand, reduce uncertainty and risk and minimize transaction costs. Statistical study of the development of commodity exchanges within the agricultural market of Ukraine in 2000-2012 has been conducted in the paper. We have found that despite the development of exchange trade patterns and the growing volume of transactions concluded on the exchanges, the most of the existing commodity exchanges is not a classic stock market institutions. Their activities are purely declarative and exchange trading of products and goods in this period is represented mainly by spot market (transactions in real goods for immediate delivery). The analysis of exchange activities at agricultural markets has highlighted a number of challenges both of external nature associated with underdevelopment and decline in domestic product markets, and internal ones, where the most domestic markets’ problems are associated with weak material and technical basis for the introduction of advanced technology exchange trading. Further development of the stock market should be aimed at transforming exchanges of real goods into the futures exchange. Formation of futures exchange price, its hedges will allow to act more predictable for all interested parties of wheat market and other agricultural products, as well as of financial and credit markets that supply resources to agricultural producers

Keywords: agrarian sector, exchange market, commodity exchange, hedging, futures.

JEL: D53, Q13

ZAGURSKYI O. . Problems and prospects of an exchange activity in agrarian sector of the economy / O. . ZAGURSKYI // Фінанси України. - 2014. - № 5. - C. 86-95.