Philippine E-Journals

Forecasting The Price of Philippine Sugar

Milagros F. Malaya

Discipline: Economics, Business

 

Abstract:

Individuals involved in commodities tradingbelong to two groups: hedgers andspeculators. Hedgers are: 1) the producers ofthe commodity who want to ensure the futureprice of their product; and 2) the consumers

of the commodity who use futures to protecttheir inventories from price fluctuations.In contrast, a speculator attempts toderive a rate of return on the purchase of thecommodity in line with the risk he accepts inthe transaction. In this regard, the speculatoris like the typical stock investor who buys stock

when he expects a price increase and sellsstock if he expects a price decline. He has nointention of ever taking or making a deliveryof any commodity.