The price variation of cereals and its influence on the price stability of products in the cereal sector in Poland

This article points to the problem of price risk measured with the level of variation in the prices of cereal raw materials and products from 1996 to 2011.It also determines the conditions influencing the scale of this risk. In the context of the research findings the author of the article attempted to conclude that there is price risk transfer on that market within the consecutive links of the chain of cereal production. The occurrence of this phenomenon would be of vital importance in the building of a price risk management strategy and stabilisation of income of the business entities in the cereal sector. The research proved that in the entire sector the price risk in cereals is the highest at the production stage. The cereal processing entities proved the tendency to gradually reduce the share of costs of cereal products in retail prices of food. Further analysis of the results gives grounds for the statement that the process of price transfer in the chain of cereal production goes along with the process of risk transfer in consecutive links of the chain. However, this may be limited to the share of the price of the raw material from a lower link in the price of the product from a higher link of the production chain