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1000
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Abstract/Summary
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It is a widely held belief (IPCC) that climate change brings more risks to the world. - Since the start of MACSUR, TradeM has had risk on the agenda, but few results have so far come out. It has been claimed though, that there is no evidence for more risk in the global wheat market (Steen and Gjølberg 2014) (TradeM workshop at Hurdalssjøen). - I have myself had the ambition of creating a dynamic stochastic model of the food system in which risk would be an integral part, but time has been too short. I I have also pointed to methods from finance to reveal insights, and that is the road to be followed here, guided by Bølviken & Benth (2000): Buyer’s risk larger than seller’s risk —due to asymmetric distribution of returns. Large price jumps are more likely than equally sized price falls. - Long term positions much more risky than short term ones — as expected. - Agricultural commodities much less risky than crude oil. - Price risk are related to volatility, and their changes over time will have similar causal explanations. - Risks of producers and consumers of agricultural commodities will to some extent be related to the price risk, and also to their portfolios and the co-variance between returns:
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