La observación

PKO futures

PKO c.i.f.

0 200 400 600 800 1000 1200 1400 ja nv. 05 Ap r 20 05 Ju l 2 005 oc t.0 5 ja nv. 06 Ap r 20 06 Ju l 2 006 oc t.0 6 ja nv. 07 Ap r 20 07 Ju l 2 007 oc t.0 7 ja nv. 08 Ap r 20 08 Ju l 2 008 oc t.0 8 ja nv. 09 Ap r 20 09 Ju l 2 009 oc t.0 9 ja nv. 10 Ap r 20 10 Ju l 2 010 oc t.1 0 ja nv. 11 Ap r 20 11 Ju l 2 011 oc t.1 1

Chart 8: Palm oil physical and futures prices, US$/ton

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commodity prices. A Commodity Exchange63 is usually an incorporated non-profit association that determines and enforces rules and procedures for the trading of commodities and related investments. It is a market in which multiple buyers and sellers trade commodity- linked contracts on the basis of rules and procedures laid down by the Exchange.

The purpose of the futures exchange institution is to act as intermediary and minimize the risk of default by either contracting party. The exchange requires both parties to put up an initial amount of cash, called the margin. Since the futures price will generally change daily, the difference in the prior agreed-upon price and the daily futures price is settled daily also. The exchange will draw money out of one party's margin account and put it into the other party account, so that each party has the appropriate daily loss or profit. If the margin account goes below a certain value, then a margin call is made and the account owner must replenish the margin account. This process is known as marking to market. Thus on the delivery date, the amount exchanged is not the specified price on the contract but the spot value (since any gain or loss has already been previously settled by marking to market). Trading on a commodity exchange offers numerous benefits. One of the primary functions of a commodity exchange is to provide an efficient price discovery mechanism64 by bringing together a large number of buyers and sellers. The commodity exchange not only enables buyers and sellers of the commodity to insure themselves against the negative effects of price fluctuations, but also performs the function of auctioneer, that is, it provides the most efficient mechanism for determining a market price. This price can then be used as a benchmark for cash transactions by producers, dealers and consumers. Other benefits of commodity exchanges and of future markets, in addition to price determination, are the provision of a means for disseminating information on price levels, enforcing contract performance, and addressing solvency and credit risks. Because of the laid-down rules and procedures, deals in a commodity exchange are transparent; prices are published and market information is available to all players, which ensures a guaranteed settlement system and reduces price risks.

Exchanges ensure also the maintenance of quality standards of commodities traded and the trading practices, offering a cost effective marketing system through transparent costing and pricing of transactions. The price levels established on the open market can therefore represent accurate depictions of the prevailing supply/demand situation, whether in the spot market for current deliveries or in the forwards/futures markets for deliveries at predetermined time and place.

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A tiny bit of history: the first equivalent of a commodity exchange is said to have been developed around year 580 BC by the Greek philosopher Thales of Miletus. He used to made agreements with local olive press owners: he deposited his money with them in exchange of the guarantee that he will be granted the exclusive use of their olive presses when the harvest was ready. Thales successfully negotiated low prices because the olive harvest was in the future - no one knew whether the harvest would be plentiful or poor, and because olive press owners were willing to protect themselves against the possibility of a poor yield. When the harvest time came, and many presses were needed concurrently and suddenly, Thales let them out at any rate he pleased, and made large quantities of money.

The first futures exchange market in today’s sense was established in 1730 in Japan as a rice exchange, to meet the needs of samurais; these aristocracy warriors were paid in rice and, after a series of bad harvests, they needed a stable conversion to cash money. Further futures trading continued at the same period in Japan with silk and in Holland with tulip bulbs.

The first standardized futures contract has been established by the Chicago Board of Trade in grain trading in 1864. In 1875, cotton futures were being traded in Mumbai and within a few years this had expanded to futures on the edible oilseed complex, raw jute and gold bullion.

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The method of determining spot prices through basic supply and demand factors; for example, if the demand for a particular good is higher than its supply, the price will typically increase - and vice versa.

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To be successful, a futures market requires a turnover high enough to make it possible to open or close out a contract or a number of contracts at a moment's notice without distorting the price. Large-volume trading provides flexibility over time, enabling futures traders to select a particular month from among an assortment of delivery months and thus provide a hedge against the risks involved in their physical transactions.

Oil palm farmers have a direct advantage to be informed on price levels via commodity exchanges: they are more accurately informed about market, pricing and the reference prices and are more likely to find a market for their crop, as the true level of demand is reflected in the price signals. Cropping based on futures rather than on spot prices increases the likely returns and facilitates crop diversification, as farmers can better appreciate the comparative prices of different crops, and ultimately income differentials. Moreover, futures trading reduce the intra-seasonal spot price volatility and farmers’ returns, as they are in a position to hold on the product until price level is good, in other words they can take more marketing decisions themselves. Through its price risk management function, an exchange helps farmers to avoid large losses when prices fall and offers them an increased bargaining power and better income predictability.

Exchanges monitor and ensure the integrity of their member companies and brokers and provide dispute settlement systems through rules of arbitration offering a faster alternative to the court system.

The following commodity exchanges offer futures trading in palm-products • Dalian Commodity Exchange (DCE)

Dalian Commodity Exchange (http://www.dce.com.cn/portal/cate?cid=1114585896100) is a non-profit, self-regulating and membership legal entity established in 1993. It is one of the four futures exchanges in China. Futures products offered are refined palm oil and RBD palm (as well as, amongst others, non-GMO and GMO soybeans, soybean oil and meal).

• Bursa Malaysia Derivatives Berhad (BMD)

Bursa Malaysia Derivatives Berhad (http://www.bursamalaysia.com/website/bm/about_us/) is an exchange holding company operating a fully-integrated exchange and offering the complete range of exchange-related services including trading, clearing, settlement and depository services. Today65 BMD is one of the largest bourses in Asia66, operating the most successful crude palm oil futures contract (FCPO), USD crude palm oil futures (FUPO), and crude palm kernel oil futures (FPKO) in the world. Market and price information provided by

Bursa Malaysia can be accessed at: http://www.bursamalaysia.com/website/bm/market_information/market_statistics/

By mid- 2009, Bursa Malaysia launched Bursa Suq Al-Sila67', the first sharia-compliant68 commodity trading platform in the world, specifically designed to facilitate Islamic finance.

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Previously known as Kuala Lumpur Stock Exchange (KLSE), the Exchange was set up in1930, initially as a part of the Singapore Stockbrokers' Association dealing in securities in the British Malaya.

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The ten wholly-owned subsidiaries of Bursa Malaysia own and operate the various businesses, namely operation and maintenance of: a securities exchange, futures and options exchange, an offshore financial exchange, a registered electronic facility for secondary bond market, a clearing house for the securities exchange, a clearing house for the futures and options exchange, a central depository. It also acts as a nominee for the central depository and receives securities on deposit for safe-custody or management, provides and disseminates

67

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This fully electronic commodity trading platform used crude palm oil the launch commodity. Under the Bursa Suq Al-Sila concept, the bank buys crude palm oil from a producer and sells it to a customer at a profit. The customer then sells back the commodity to the spot market for cash.

At the end of 2009, Bursa Malaysia Berhad entered into a strategic partnership with Chicago Mercantile Exchange (CME), with a view to improve global accessibility to its derivatives. This allowed CME Group to develop a US dollar-denominated, cash-settled contract using Bursa Malaysia settlements as its reference, at its Globex electronic platform69 in Chicago. With the launch of futures on crude palm oil, CME Group customers are able to trade the palm oil in a cash-settled, dollar-denominated contract, with the safety and liquidity of the CME Group. The expansion of the palm oil also creates opportunities for cross-trading with soybean oil, based on the historically strong correlation between these products. The final cash settlement prices70 are based on the Bursa Malaysia Derivatives Berhad Crude Palm Oil futures contract (FCPO). This is the global benchmark for crude palm oil that is physically delivered and traded in Malaysian ringgits.

More info on CME at http://www.cmegroup.com/company/history/ and on crude palm oil futures contract at http://www.cmegroup.com/trading/agricultural/crude-palm-oil-futures.html

• Jakarta Futures Exchange

Jakarta Futures Exchange was set up in 2009 (PT. Bursa Berjangka Jakarta JFX, at http://www.bbj-jfx.com/). This multi-commodity futures exchange started by launching crude palm oil physical trading contracts, previous to establishing its first futures trading contract in palm olein.

• Indonesia Commodity & Derivative Exchange (ICDX)

The Indonesia Commodities and Derivatives Exchange (http://www.icdx.co.id/), launched in 2010, is attempting to win business from the South East Asian region, most notably Bursa Malaysia. The exchange is operating a crude palm oil futures contract (CPOTR) and a RBD olein futures contract (OLEINTR).

• Singapore Exchange (SGX)

Singapore Exchange is the Asian gateway connecting investors in search of Asian growth to corporate issuers in search of global capital. Formed in 1999, the Exchange is the result of merging two exchanges: Stock Exchange of Singapore and Singapore Intl Monetary Exchange. The Exchange was a founding member of the GLOBEX Alliance, together with some other leading derivatives exchanges. It also has alliances or significant relationships with the Chicago Mercantile Exchange, the American Stock Exchange, the Australian Stock Exchange and the National Stock Exchange of India. At present it operates a crude palm oil futures contract; more information can be accessed at:

http://www.sgx.com/wps/portal/sgxweb/home/about_us/!ut/p/c5/DcrbDoIgAADQL2ogltijiqGW hWXLeGneYiRCZSvz62vn9QAO_nT5lqJ8SaNLBQrAnQvyvHkEA7h0LYphfEQx8_OMHrAN

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Sharia-compliant means “in accordance with Islamic law” and implies financial activities and investments that comply with Islamic law which prohibits the charging of interest and involvement in any enterprise associated with activities or products forbidden by the Islamic law.

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The CME Globex trading system was introduced in 1992 as the first fully electronic trading platform for futures contracts

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Cash settlement is a more convenient method of transacting futures contracts, whereby the seller of a commodity who does not wish to take ownership of the physical commodity traded (palm or palm kernel oils in our case), can pay the difference between its spot price and the futures price without being delivered.

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EsCFMtV_nkjdjcR4goRkP0w-VFGFkl1MZZgcjBemkZr1Gn-

Z38E6s8_CkF7ncvEsJpYprGBMtXWS7Xxzo3BYB-hcaKvhXxdRPo0WG-

RqeDTukQRM7R1xxamxV2Abmb4F9676_AB4AThP/dl3/d3/L2dBISEvZ0FBIS9nQSEh/ • National Commodity & Derivatives Exchange Limited (NCDEX)

Headquartered in Mumbai, the National Commodity & Derivatives Exchange Limited (http://www.ncdex.com/Index.aspx) is a private limited on-line multi commodity exchange incorporated in 2003. The exchange operates future contracts on crude palm oil and RBD palm olein.

• Multi Commodity Exchange of India Ltd – MCX

Established in 2003 and located in Mumbai, the Multi Commodity Exchange of India Ltd (http://www.mcxindia.com/aboutus/aboutus.htm) is an independent electronic commodity exchange having received the permanent recognition from the Government of India. The exchange facilitates online trading, clearing and settlement operations for commodity futures markets across the country.

• National Commodity & Derivatives Exchange Limited – NCDEX

This Indian multi commodity exchange was incorporated as a private limited company in 2003. The exchange offers a crude palm oil futures contract.

4.3 Contracts

Contracts are legal trade documents. The considerable variety cash and futures contracts in use reflect the complexity of oilseeds, oils and fats trade.

4.3.1 Physical (cash) contracts

A considerable number of cash contracts are used in oilseeds, oils and meals trade because of the complexity of trading operations. FOB, CIF, pro forma and informal cash contracts are extensively used in palm products trade.

• FOB and CIF contracts

These contracts are established in accordance with the internationally accepted INCOTERMS, i.e. the international rules for the interpretation of trade terms, published by the International Chamber of Commerce. Information and links on INCOTERMS and on the obligations of buyers and sellers and the main documentary requirements for FOB and CIF contracts are detailed in Annex V.

• Pro forma contracts

Pro forma contracts are issued by various trade associations. Although trading parties can contract with each other on any terms they desire, the use of pro forma contracts, particularly those containing agreed standard and semi-standard clauses (such as those of FOSFA), facilitate the transaction. When traders use a pro forma contract, they need only to refer to the nonstandard parts of the commodity, its position and price; the rest of the contract is covered by pre-existing terms that have been agreed to, and widely accepted by, the trade. Pro forma contracts enable trade to be undertaken on a "string" basis, i.e. the trader can accomplish the entire trade procedure under the same contractual terms. This is because the organizations negotiating contractual clauses do so in close cooperation with all sections of

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the trade (for example shippers, middlemen, buyers and consumers) and thus ensure that the standard clauses are in harmony with trade practice, are consistent with other contracts and fit the purpose for which they are intended. Pro forma contracts are issued under FOB or CIF terms.

For the international physical or cash trade in oilseeds, oils and meals (including palm kernels, palm and palm kernel oils and palm meal), two main international trade associations have formulated various rules and standard contractual specifications, terms and conditions in the form of pro forma contracts. These are the National Institute of Oil Seed Processors - NIOP71, based in Washington D.C. and the Federation of Oils, Seeds and Fats Associations Ltd. - FOSFA International72 based in London. These rules and contracts are updated on a regular basis to reflect changing practices in the trade. Some major traders in countries such as India, Pakistan, China etc., have their own trading specifications, often based on FOSFA International or NIOP contracts, modified to suit local conditions.

Trade is facilitated by the existence of bulking installations at the major ports of loading for the export of the palm oil products. Codes of practice for the handling and shipment of palm oil have been formulated by the international trade associations to ensure the quality of the oil is protected. For example, the trading contracts such as FOSFA and NIOP stipulate that the previous cargoes of the ship carrying palm oil must not be any from the list of banned substances.

FOSFA provides a range of arbitration services (dispute resolution) to meet the needs of the international trade. The Federation holds also training programmes for the trade which offer unique training facilities for all aspects of the oilseeds and oils and fats trades. A week-long basic course, for instance, is aimed at junior members of the trade/industry with little or no knowledge or experience in a trading environment The training course73 covers elementary aspects relating to the international trade in oilseeds, oils, fats including FOSFA contracts, contract referred documents, arbitration and appeal, shipping, insurance, commodity banking and technical matters.

The main pro forma contracts in use in palm and palm kernel oils international trade are the followings:

FOSFA 4 Oil seeds in bulk, F.O.B., stowed and trimmed terms

FOSFA 29 Palm kernels, C.I.F basis, 49% oil content (test by petroleum ether or hexane)

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NIPO, based in Washington D.C, is an international trade association with the principal objective of promoting and supporting the general business interest of persons, firms and corporations engaged in the buying, selling, processing, shipping, storage and use of vegetable oils and raw materials. It’s about 120 members in 15 countries include importers and exporters, samplers, transportation operators, brokers, testing laboratories, storage tank operators, processors, refiners, food manufacturers, insurance companies, soap and cosmetic firms and coconut and palm plantation operators. See http://www.niop.org

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FOSFA is a professional international contract issuing and arbitral body concerned exclusively with the world trade in oilseeds, oils and fats with over 950 members in 79 countries. The members include producers and processors, shippers and dealers, traders, brokers and agents, superintendents, analysts, ship-owners, and others providing services to traders. FOSFA has an extensive range of standard forms of contracts covering goods shipped either CIF, C&F or FOB, for soybeans, sunflower seeds, rapeseed, and others, vegetable and marine oils and fats, refined oils and fats, from all origins worldwide, for different methods of transportation and different terms of trade. Internationally, 85% of the global trade in oils and fats is traded under FOSFA contracts. The Federation's contracts incorporate a dispute procedure involving arbitration by experienced individuals from within the trade. See http://www.fosfa.org.

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FOSFA 29 A Nigerian palm kernels, C.I.F. basis, 49% oil content (test by petroleum ether or hexane)

FOSFA 31 Nigerian palm kernels F.O.B. net shipping weight basis, 49% oil content (test by petroleum ether)

FOSFA 53 Vegetable oil (in bulk) F.O.B. terms

FOSFA 54 Vegetable and marine oils in bulk, C.I.F terms

FOSFA 61 Vegetable oils, tallow and greases, in packages, C.I.F./C&F

In document Precarización social y alimentación: un análisis de los comedores sociales de la ciudad de Barcelona (página 35-39)