farm commodity prices
The development of economic relations led to the formation of the world food market, i.e. the market on which the purchase and sale of the food goods between the countries of the world at the world prices.
The world's farm commodity prices are formed on the exchanges on the basis of the costs in the best of conditions the production of (natural-climatic, technological, political, to such conditions also include state support of agricultural producers, and a system for maintaining farm commodity prices, promotion of export, development of rural infrastructure, etc.)
Trade agricultural products on the world market is conducted on a number of different channels:
•for one-time transactions
•barter contracts (when, for example, South American countries, exchange of agricultural products for oil from OPEC countries)
•special agreements (delivery of the loan)
•exchange trade
•the auction trade
A significant spread in the modern organized by the world trade commodities were stock exchange transactions. On the major stock exchanges of agricultural products in Chicago, new York, Kansas city, Sao Paulo, Buenos Aires, London, Amsterdam, Paris and the other shall be determined by the world price of free markets for different products. Exchanges are working as a physical commodity, as well as with futures contracts.
In the conditions of standardization of the exchange commodity farm commodity prices are defined initially in the basic varieties of products as a kind of reference point in the transition to the prices on the products of other varieties. The basic sort of taken the most common type of product on a particular market. Other varieties of products are ranked with the help of coefficients on the extent received as a result of their consumption of the useful effect. The price of the basic grades of products and ratios to it are used for determination of the price of other varieties.
At the auctions are determined by the farm commodity prices for tea (India, Kenya, United Kingdom), wool (Australia, New Zealand), flowers (Holland). Daily sets prices for vegetables and fruits in the Benelux countries, where about a hundred years, there is a system of auction trade.
In the various markets of agricultural products are the specific generally accepted system of additional payments to prices and discounts with them taking into account the quality of the goods sold. For example, in the international trade of leather raw material prices vary depending on the region of its origin, thickness, grade, color and some other qualitative indicators of the skin.
Often for the definition of farm commodity prices varying degrees of processing are used formulas that allow them to withdraw proceeding from the price of the finished product. Prices on the world raw materials markets are also taking into account the content in the products of useful components.
