A FUTURES MARKET FOR MAIZE IN SOUTH AFRICA

A futures market can potentially alleviate some of the existing marketing problems in respect of maize, particularly with regard to price risks. The futures market does not function separately from the price-fixing system. The cash price, forward contract price and future price are interdependent. In theory little fault can be found with the operation of a futures market. An option scheme may increase the potential benefits of a futures market. However, before a futures market can be implemented, certain requirements must be met, inter alia, a freer market, sufficient liquidity, the training of the parties concerned and an efficient information system