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• Economic issues of crop based ethanol production for energetic uses

  90-94

  László Kozár

  Views:

  102

  The United States Congress passed the “Clean Air Act” in 1990, which targeted the creation and use of so-called “green fuel”. This Act came into full force on January 7, 1995. Its essence is that an oxygen rich component is added to fuel by which it burns more cleanly and harmful emissions of vehicles are reduced by 25%. This oxygen rich component is basically ethanol and its ether ETBE, made of domestically produced grains.
  America’s traditional grain exporter status could be converted into a stabile income resource during production, many more valuable by-products – should this program succeed – are also produced, giving the opportunity for further utilisation either in the foods or form feeds industries, or as export products.
  Ethanol or ETBE production is also important to replace fuel imports from any specific country, the additive which is necessary for producing the fuel is the imported product MTBE.
  This programme therefore simultaneously assisted in environmental protection, agricultural and foreign trading issues as well as some market regulation issues. At the same time, based on grain production, it has an effect on the social strata by creating new jobs, especially in those areas which can be considered in recession due to the lack of any large-scale industrial cities.
  In the future, the European Union should carry out this project and it will affect Hungary, as well.

• Price Risk Management by Futures Markets and Public Warehousing

  58-65

  László Kozár

  Lóránt Fodor

  Views:

  98

  The principal achievement of this paper is the combinative use of two market institutions: public warehousing and commodity exchange and how their joint application is beneficial for the players on the grain market. Based on a theoretical foundation, a calculation model was developed in order to assist short and long-term marketing decisions. It allows all the three participants of the market: producers, consumers and traders, to use this model in order to establish their own business strategy. The model can be used to analyse factors influencing the establishment of price; therefore, it can be also used for policy-making decisions.

• The Possibilities of Futures and Option Hedge in Price Risk Management for GrainProduction

  72-80

  László Kozár

  Views:

  95

  The greataest risk tograin production is fluctuation in market prices, which is over 50% over the course of a year; and year by year, as well. There are real market circumstances in the grain market, instead of state guaranteed fix prices, which was the norm under the former political system.
  According to the general opinion of producers, losses come from their defencelessness against buyers. The real situation is that price risk can be managed by suitable market strategy, and loss production can be avoided.
  Hungary has a futures market (which is organized according to the CBOT system) in the grain sector, which is an unique institute in Europe. This organisation is suitable for hedge businesses and it has convenient technical and institutional background.
  There are two possibilities to make hedge business. One of them is the short hedge with futures contract when the producer sells his product for long term if an acceptable profit is included in market price. In this case seller can protect himself against low market prices.
  This technique can be considered as professional for price risk management, but possibly has financial cost because of the weak financial situation of Hungarian producers this solution seems expensive for them.
  There is an other possibility in the Commodity Exchange for manage price risk, that is the option technique. This solution is suitable for insure prices as well, and has an other additional advantage, namely: there is no financial costs in this case.