Establishment of Commodity Exchange in Bangladesh: Lessons from some Selected Countries
Tahira Farzana*
Tasnima Aziza**
Shahriar Kabir***
Abstract: At present, commodity exchange is being used globally as a technique to mitigate the risk faced by the producers of agricultural commodities. Experts believe that the establishment of commodity exchange markets in Bangladesh also might be an effective tool to address the problems like the poor state of rural market infrastructure; market imperfections, and the absence of risk minimizing instruments. This article has highlighted how the selected countries (three from Asia and five from Africa) have been utilizing commodity exchanges, what are the requirements for the successful implementation of those markets, and how these countries are being benefitted from this practice. Finally, based on the experiences gathered from the selected countries, the article identifies the need for commodity exchanges in Bangladesh, the prerequisites for developing such markets, and the proposed structure for the commodity exchange in Bangladesh.
Keywords: Commodity exchange market, Price risk management, Gateway, Certified warehouses, Warehouse receipt system, Ministry of Commerce, Government of Bangladesh.
* Lecturer, Institute of Business Administration, Jahangirnagar University, Savar, Dhaka.
** Assistant Professor, Institute of Business Administration, Jahangirnagar University, Savar, Dhaka.
*** Assistant Professor, Institute of Business Administration, Jahangirnagar University, Savar, Dhaka.