Commodities Market Example For Free - Free Essay Example

Sample details Pages: 6 Words: 1934 Downloads: 1 Date added: 2017/06/26 Category Economics Essay Type Essay any type Did you like this example? The agreement to buy and sell such commodities is made through contracts to bring in legality in trading as it involves cash payments margins, delivery of goods and scope for profit maximisation. The emergence of contract systems eventually led to trading in contracts whereby a middlemen stands in between buyers and sellers. The active trading in such contracts brought standardisation which in turn led to the development of futures contracts. Don’t waste time! Our writers will create an original "Commodities Market Example For Free" essay for you Create order A future contract is a standardised, binding agreement to make or take delivery of a specified quantity and grade of a commodity at an established point in future at an agreed upon price. The organization of merchants involved in the trading these commodities evolved into an organisation that standardised the contracts and trading practises and came to be known as The Futures Exchange such as the New York Board of Trade (NYBOT) and the London International Financial Futures Exchange. One essential objective of the exchange is to provide the dealers with all necessary information with regard to price volatility i.e. the magnitude of price movement in either direction. Note that it measures price risk and volatility but does not remove or eliminate risks. The exchange provides the benchmark for the determination of price by making price margins mandatory for effective fair trading. Future transactions do not require full advance payments for the commodity (just the margin) , the buyer of a futures contract which increases in value (or the seller of futures contract which decreases in value) can realize a profit which can be substantial in relation to the commitment of capital. Brazil today is the world largest producer of coffee. Considering this figures, it is not surprising to note that it has attracted considerable amount of speculation and ever increasing susceptibility to price volatility. Coffee production has direct linkage with weather besides many other factors such as world coffee prices. A coffee drink manufacturer will buy coffee beans from a coffee producer at an agreed price if he/she expects to have drastic climatic changes which will result in coffee being expensive at a future date. A sudden drop in the production in future will cut supply and make it more expensive. the buyer can, therefore, avoid unnecessary risk by buying a futures contract that will guarantee him delivery of coffee at a future date at a price fixed now. However, it must also be noted that he/she will suffer loss if the future current/spot price of coffee beans were to fall drastically due to improved production and competitions. Take an example of Brazil The Brazilian Crop was initially expected to produce about 50 million bags of coffee. Seasonal disturbances such as rain, harvest delays and quality problem caused production to fall to 33.5 million bags. Due to severe drought in Viet Nam coffee production dropped by almost 1 million bags. These shortages of coffee output distort the supply level which leads to a global rise in prices. So what roles does the future markets play in the production and selling of coffee? Taking these points into account the next chapter looks at the Indian and world coffee markets and the role future market plays in its pricing. In the analysis, I have made use of some articles from the Times of India newspaper and other websites. It is logical to state that at times of shortage prices tend to go up due to higher demand and which in turn puts pressure on sellers to sell their product at a lower price. We know from our analysis before that a buyer will resort to futures contract if he expects the prices to go up in future. However considering that the production too has been low the chances of producing the required amount to meet the demand is less which adds to speculation in the market. The report also suggests one source as saying that it is better to pay penalty and cancel a contract rather than to loose significant amount of money by fulfilling it. Note that sometimes the whole idea of futures contract is not meet the obligation in terms of delivering the commodity but to profit from the speculation that these uncertainties give rise to. The world coffee production in 2003/2004 was estimated to be around 105.3 million 60 kilogram bags down nearly 2 percent from forecast made in June and down 15 percent from the 2002/03 season. Factors such as low er production contribute to great extent the price determination. For the year 2004/2005 it was widely believed that Brazilian coffee production to be around 33-35 million bags but due to substandard weather and low level of investment the production is likely to be below 30 million bags. This drop in production is likely to cut the supply level and Brazil being the world largest producers, any drop in its output will affect the world supply and thereby raise the price. These uncertainties lead to prices going up in the futures markets. It has long been felt that some traders hold stocks to push the prices up and then sell it to make supernatural profits. Lets look at the graphical representation of prices of Robusta class of coffee as determined at the International Coffee Organisation (ICO) to assess the trends in the market. The graph below shows that since November 2004 Robusta coffee prices have increased at a slow and steady pace. However, a report that appeared on the Economic Times suggests that volatility in the world prices over the last few days have affected trading in coffee in the markets. The ICO in its Coffee Market Report seems to suggest that the downturn in mid-April caused a slight fall of 3.19 percent in the monthly average of the ICO Composite Indicator Price which dropped from 101.44 cents/lb in March to98.20 cents/lb in April. It also suggests that this has been due to high level of activity from various investment funds. Comparing the results put forward by the ICO to the recent reports in the Economic Times newspaper (24/05/2005) the volatility in the world prices have triggered a bullish trend in the Indian markets which explains why trading in the coffee auctions markets have suffered. Estimates shows that there was a 40 percent drop in the overall quantum sold when compared to the previous ICTA auction. The beginning of the year showed a significant climb in the moving averages between January and mid-March and then a significant drop till the mid of April. One of the least complex ways to use a moving average is to simply look at the slope a rising slope indicates that the market is in an uptrend and falling slope indicates a downward trend in the market. Moving Averages is a statistical technique for smoothing price movement in order to identify the trends more easily. It is equally important to understand that moving averages are sensitive to the number of days used to calculate the average i.e. the more days that are used; the less sensitive is the average. Some experts are of the view that MA can be a critical factor in decision making. For e.g. traders can make use of one or more MA to determine buy or sell decisions i.e.to use a slow MA together with a fast MA. A slow moving average can be calculated by taking more days opening or closing prices and fast moving average by taking fewer days prices. In a more elaborate way, what it means is that you must buy when the fas ter MA goes above the slower one and sell when the faster MA goes below the slower one [or] buy when prices are above both fast and slow MA and sell when prices are below both MA. The chart below is a graphical example of how a Moving Average looks like as of 05/27/2005. The Red Line (price line) is above the moving average so the trend is up indicating that the market is bullish and also the fast moving average (dark blue) is above the slow moving average (light blue). Volume of7078.00 suggests the measure of trading activity during the selected period of time. It refers to the number of futures contract that are either bought or sold during that period. Open Interests, on the other hand, measures the number of futures contract that remains open at a particular point in time, usually at the closing of trade. In the next chapter, I have looked at India as a producer of Coffee. India is relatively new into the coffee future markets and has performed exceedingly well. Ho wever, due to the speculative nature of the futures market and also bureaucratic hurdles have led to decrease in contract sales and increased price and non-competitiveness in the global coffee market. The two principal species of coffee grown in India are Robusta and Arabica. Trading in coffee futures was introduced only recently and prices are extensively depended on the coffee trading in the New York and London futures markets as it has considerable influence on the world coffee prices. These prices are notoriously volatile and varies considerably due to factors such as weather forecast, size of the coffee stock worldwide and speculations in the futures markets The Indian coffee production and physical trade is worth over $ 430 million annually. The production of Indian coffee is greatly influenced by world prices particularly since it is the second largest actively traded commodity in the world market. The Coffee Futures Exchange India Limited was formed under the sup ervision of Forwards Markets Commission to look into all trading practices affecting coffee prices. The main objectives are To provide hedging opportunity against coffee price risk. To ensure guaranteed delivery of coffee. To provide a price discovery mechanism for future period up to 18 months at any given point of time. Besides these it is important to look at the mechanism COFEI uses to ensure that market participants follows the rules in ensure financial integrity. Factors such as margins, Price limits for trading, daily marking-to-market of all trades and sufficient capital including guarantee funds ensures that proper procedures are followed when a contract is bought and sold. In India, coffee has been categorized into 4 different types with each having different margins for smooth and efficient trading. The table next page gives a snapshot view of how coffee in India is traded and in particular the different class of coffee whether raw or clean. The coffee industry, in general, has seen surge in prices by almost 40 percent. Exports in recent times have been hit quiet badly. Reports on the Financial Express newspaper suggest that export have suffered especially due to the price non-competitiveness in the world markets. India exported nearly 225,000 tonnes of coffee last year with majo rity (50 %) of it going to Europe. Indias coffee production and exports for the year 2005-06 (October-September) are forecast to increase by 5% and 29%, respectively. The anticipated rise in coffee export is against the backdrop of almost 26% decline in the current year (2004-05/Oct-Sep). Coffee exports are expected to fall to an eight-year low of 169,980 tonne, or 2.83 million 60-kilogram bags, in the current year ending Sept 30, from 229,320 tonne, or 3.82 million bags, a year earlier. India, the worlds fifth-biggest coffee exporter is set to witness decline as farmers and traders are withholding beans on expectations of higher prices. One of the biggest problems facing the traders in the Indian coffee industry is the time difference between India and the New York and London trading centres. Indian traders were now finding it difficult to hedge their risk. The local exchange functioned only till 5pm when the LIFFE and NYBOT and other European markets functioned till ov er 11.30 pm IST.

The Scarlet Letter And Arthur Miller s The Crucible

Carter Beaulieu Mr. Damaso AP English III, Period 5 21 October 2014 Puritanical Deception (1000) Emigrating from the Old World to purify the Church of England, the Puritan society was one of very strict religious beliefs. Believing in living plainly, the Puritans denounced those who went against their ways. They even excoriated fellow members of their community if a sin was bound to ones name. One sin in particular, adultery, was seen as a contravention to the covenant that the Puritans had established with God. Church leaders believed that unless the sinners were chastised, God would punish the whole community for a sin of such a magnitude. Despite having a sought out system of punishment for sinners, the tougher task for these leaders was to figure out who in fact was a sinner, as some did not confess. Those who did not confess or who had not been caught would behave hypocritically in order to preserve their reputation and avoid punishment. In both Nathaniel Hawthorne’s The Scarlet Letter and Arthur Miller’s The Crucible, the repercus sions of committing adultery are exhibited through characters in two different puritanical societies. Arthur Dimmesdale, Hester Prynne, John Proctor, and Abigail Williams are all victims to this. Despite living in sincere societies, these characters behave hypocritically in order to hide a concealed truth, resulting in internal ignominy, until they ultimately confess. Arthur Dimmesdale shows his guilt andShow MoreRelatedThe Folly of Punishment in Nathaniel Hawthrone ´s The Scarlet Letter, Arthur Miller ´s The Crucible, and Aladdin1978 Words   |  8 Pagestwo of the the works the greed is used for evil and in one the greed is used for good. In the first work of art, Scarlet letter by Nathaniel Hawthorne, we see an antagonist named Roger Chillingworth try to seek revenge on the protagonists lover. Roger seeks revenge on the protagonist, Hester Prynee, because the protagonist is his wife and she committed adultery. In the novel Scarlet letter it begins with a lecher on top of a scaffold with a baby in her arms, it is revealed that she is an adultererRead MoreHuman Society Problems in Nathaniel Hawthrone ´s The Scarlet Letter, Arthur Miller ´s The Crucible, and Ilmar Raay ´s Klass1604 Words   |  6 Pageswhich three works, The Scarlet Letter, written by Nathaniel Hawthorne, The Crucible, A play written by Arthur Miller , and the movie K lass (The Class), directed by Ilmar Raag, all use to display the problems within human society. All 3 works emphasize the human tendency to â€Å"gang up† to avoid being singled out. The connecting theme between these works is that humans group up to avoid being singled out, and will do almost anything to stay in the group. 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The Crucible focuses on theRead MoreThe Scarlet Letter and The Crucible Essay example1847 Words   |  8 PagesHuston  1   Zakary  Huston   Mr.  Montalbano   AP  English  Language  and  Composition   11  August  2014   The  Scarlet  Crucible      Both  Arthur  Miller’s  Ã¢â‚¬â€¹ The  Crucible​   and  Nathaniel  Hawthorne’s  Ã¢â‚¬â€¹ The  Scarlet  Letter​   include   instance  of  settlers  of  the  New  England  colonies  being  affected  by  Puritan  law.  Their   commentary  on  Puritan  society  is  spread  throughout  their  works.  Their  views  on  the  laws  set   forth  by  Puritanism  are  easily  found  within  their  stories  about  the  various  occurrences  in  a   theocracyRead MoreComparing John Proctor and Arthur Dimmesdale from The Scarlet Letter1157 Words   |  5 PagesComparing John Proctor and Arthur Dimmesdale John Proctor and Arthur Dimmesdale are exceptionally similar characters despite the fact that each was written about in very different eras. Both characters lived in the same time period, however, The Scarlet Letter was written in the late 1800’s, and The Crucible was written in the 1950’s. One cannot look at the qualities of Proctor and Dimmesdale without discussing each author and the time period in which each story was written. Despite minorRead MoreThe Scarlet Letter And The Crucible1502 Words   |  7 PagesThe Scarlet Letter and The Crucible are two stories both set in the early days of the Massachusetts colony. Both of these stories have many similarities between them, including setting, situations, and conflict. The two stories were also very different. The effects of sin on the characters, how they deal with their sin, and the consequences of their actions are different in each story. The Crucible and The Scarlet Letter are different works and although the y deal with similar conflicts the consequencesRead MoreNathaniel Hawthorne s The Mind1900 Words   |  8 PagesOld Manse in Concord, Massachusetts. 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In particular, she draws on

Decision Support Tools for Tourism Industry- myassignmenthelp.com

Question: Discuss about theDecision Support Tools for Tourism Industry. Answer: Australias local government areas are some of the most eminent attractions for tourists from all over the world (Alizadeh Shearer, 2015). Tourism is an industry that is booming and shall bring in a lot of impact to the economy in the upcoming days (Cook, Hsu Marqua, 2014). Australia is filled with tourist attractions, the big tourist attractions are the one that are strategically placed in the country to drive in huge number of tourists. The business aspect to tourism is huge and it is estimated that the tourism will become one of the most dependable industries to provide economical support to a country. I propose to open up big tourist attractions in the LGA areas of the country. The two places that I propose to open up big tourist destinations are Sutherland Shire and City of Melbourne. The beach of Sutherland Shire has been selected to build the big tourist destination while in the City of Melbourne; federation square is the area where the big tourist destination shall be opene d up. The Sutherland beaches are pristine and they constantly attract the tourists as the beach remains the biggest of the spots for the tourists to hang around (Tomlinson et al., 2015). The popularity of the place will keep attracting more and more tourists from all around the world. I wish to open up a glass globe cafeteria and performance hall in both Melbourne city and Sutherland Shire beach. The Glass globe caf will be placed at the far end of a beach in Sutherland. The glass globe will have 3 sections in it. The topmost floor will be a cafeteria that will provide the people with a stunning view of the sea to enjoy while sipping their coffee. The place will have 3 floors in total. The ground floor will be a store for souvenir and other culturally exclusive products of Sutherland. The 1st floor of the glass globe will be a hall for the performance of arts such as theatre, dance, singing and film screening. The glass globe will be transparent and the entire interior should be visible from outside. The second floor shall be covered with blue mirrored glass that shall reflect the sea in the Sutherland beach and that will make it look mesmerizing. The sea is such an attractive point for tourists around the world that people are always expected to visit the beaches. The beauty of a beach caf that has a mesmerizing view of the sea shall be a constant attraction for all those who visit the Sutherland beach. The area of Sutherland that has all the beaches is popularly referred to as the shire. The shire is known to offer the best tourist places of the city and is close to the CBD of Sydney. The distance of the beach from the Sydney airport is around 25 minutes and hence it ensures that the flow of the tourists in the glass globe caf shall never dip as it is well connected to the city. Cabs, buses and shuttles are in plenty to reach the destination. The federation square of Melbourne is a place that is full of cultural exchange and intellectual communication between people. The area is a stage for all sorts of huge events that take place in the city of Melbourne (Johnstone, Caldwell Rittenbruch, 2015). The federation square is situated at the edge Melbourne CBD and hence is crowded by tourists and local alike anytime. The major events keep attracting people and it makes the area the place to hangout for all the visitors. A glass globe caf of the same model as in Sutherland beach will work successfully in the federation square. People will be glad to hang out in at the caf of glass globe and some of the events of cultural significance can be held at the performance hall that is at the 1st floor of the glass globe. The caf will provide a view of the events that are being held at the open in the fed square and it will make the people enjoy the view while sipping the amazing coffee. The business shall keep growing because events at the square shall never stop and the closeness of the point to the CBD of Melbourne further ensures that the area shall never be deserted. The entire place is filled with buildings that are made of glass and hence the glass globe shall match the areas architecture style and make sure that it stands apart from others. The transportation is well designed for the fed square as it is connected with shuttle cars, cabs and various other transports such as bus. As it is one of the most booming locations in the country, the mass of the tourists shall be directed to the area and the glass globe shall act as a big tourist destination that the people can witness and enjoy. I believe that the idea of a glass globe at both the locations will benefit the makers and make sure that high profits are achieved. The locations are selected in a way that the best of Australia is brought together and the idea of big tourist destination achieves success. The growth of such tourist destination like the glass globe at the tow mentioned locations is certain and the next 10 years shall show growth for the tourist destination. The architecture is has to be designed in such a way that the tourists interest about the location is piqued and the marketing team has to ensure that the place gets proper media attention so that it achieves popularity in the tourism sector of the country and the Local government areas of the country. Reference Alizadeh, T., Shearer, H. (2015). A snapshot of high-speed broadband responses at local government level in Australia: a marriage between federally funded initiatives and locally driven innovations?.Australian planner,52(1), 42-50. Retrieved from: https://research-repository.griffith.edu.au/bitstream/handle/10072/69789/102364_1.pdf?sequence=1isAllowed=y Cook, R. A., Hsu, C. H., Marqua, J. J. (2014).Tourism: the business of hospitality and travel. Boston, MA: Pearson. Retrieved from: https://fau.edu/academic/registrar/UUPCinfo/UUPCOct3-14/HFT1000syll.doc Johnstone, S., Caldwell, G. A., Rittenbruch, M. (2015). Defining the InstaBooth: Facilitating debate and content creation from situated users. InProceedings: MEDIACITY 5 International Conference, Workshops and Urban Interventions(p. 187). School of Architecture, Design Environment and i-DAT (Institute of Digital Art and Technology), Plymouth University.. Retrieved from: https://eprints.qut.edu.au/84383/1/MediaCity5_DefiningTheInstaBooth.pdf Tomlinson, B., Maynou, F., Sabats, A., Fuentes, V., Canepa, A., Sastre, S. (2015). Systems approach modelling of the interactive effects of fisheries, jellyfish and tourism in the Catalan coast.Estuarine, Coastal and Shelf Science. Retrieved from: https://www.researchgate.net/profile/Antonio_Canepa/publication/284235299_Systems_approach_modelling_of_the_interactive_effects_of_fisheries_jellyfish_and_tourism_in_the_Catalan_coast/links/565c33d108aefe619b2520fc.pdf