The food and agribusiness research desk at Rabobank International believes that apple juice concentrate (AJC) futures launched on the Minneapolis Grain Exchange last month will have an impact on prices for the commodity.
In a report prepared by the bank it states that the contracts will provide both buyers and sellers of AJC with a reference price and an alternative way to trade. At the same time it opens up the market to new participants who can use the contracts for investment purposes.
A spokesperson for Rabobank said: “ACJ has suffered from increasing… volatility which has a detrimental effect on companies’ investment strategies with some decisions postponed because of short-term uncertainty, despite their long-term attractiveness. The use of exchange-traded futures and option contracts offers companies an attractive way to limit the impact of volatility, particularly due to its low capital intensity and fairly straightforward implementation.”
Overall, the bank believes that the introduction of AJC futures trading will be good for producers.
“The introduction of AJC options and futures will help the apple juice industry,” the bank’s report states. "Having a tool to reduce the volatility will help growers and processors to make investments which will further increase efficiency in China and grow production in South America.”
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