Title: Futures markets, speculation and the destabilisation of commodity sectors: a comprehensive analysis

Authors: Yves Jégourel; Jean-François Verdié

Addresses: LAREFI, University of Bordeaux, 351 Cours de la Libération, 33400 Talence, France; Toulouse Business School, 20 Boulevard Lascrosses, 31068 Toulouse, France; OCP Policy Center, Rabat Design Center, Rue Mohamed Jazouli, Madinat Al Irfane, 10080 Rabat, Morocco ' Toulouse Business School, 20 Boulevard Lascrosses, 31068 Toulouse, France

Abstract: Given the recent attempts at reforming financial excesses, the issue of commodities trading is without a doubt one of the most essential and most sensitive. As opposed to arguments aiming to prove the subordination of commodity financial markets to speculative interests, we show that these markets can be helpful not only to deal with the price risk but also to promote the dissemination of available information and serve as a tool for inventory management. However, speculation is an absolute prerequisite for their existence. Basing our work on existing literature, we suggest that although it may have a destabilising effect, speculation does not produce all the harmful effects that are sometimes alleged. In particular, it cannot alone explain the sharp rise in the price of commodities observed from 2006 onwards.

Keywords: modities; futures markets; destabilisation; commodity sectors; speculation; efficiency; index traders; commodities trading; price risk; information dissemination; inventory management.

DOI: 10.1504/IJEA.2015.074567

International Journal of Economics and Accounting, 2015 Vol.6 No.4, pp.380 - 391

Received: 08 May 2021
Accepted: 12 May 2021

Published online: 05 Feb 2016 *

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