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World Bank, “Dealing with Commodity Price Volatility in Developing Countries: A Proposal for a Market Based Approach,” International Task Force on Commodity Risk Management in Developing Countries, Washington, DC. 1999.

has been cited by the following article:

• TITLE: Cotton Hedging: A Comparison across Developing and Developed Countries

  AUTHORS: Qizhi Wang, Benaissa Chidmi

  KEYWORDS: Cotton, Hedge Ratio, Error Correction Model

  JOURNAL NAME: Modern Economy, Vol.2 No.4, September 21, 2011

  ABSTRACT: This paper uses the results of ordinary least squares, bivariate vector autoregressive, and error correction models to estimate the hedge ratios for cotton production across different countries and to determine whether New York Cotton Exchange futures prices can serve as a hedging tool for cotton producers. Models comparison shows that the error correction model fits the data better. The results of the error correction model show that the spot prices and the NYCE futures prices are co-integrated in United States, Australia, and China, but not in Africa Franc Zone countries. In addition, for countries with higher market power, such as US and China, and countries without market distortions, such as Australia, the New York Cotton Exchange futures prices can serve as a hedging tool for cotton producers. In contrast, for less developed countries, such as Africa Franc Zone countries, and Pakistan, the NYCE futures prices cannot serve as hedging tool against the risks faced by cotton farmers.