African Coffee Market Efficiency and International Hedging Viability: Evidence from Uganda

Posted: 9 Apr 2016 Last revised: 18 Jun 2020

See all articles by Thad Jackson

Thad Jackson

University of Minnesota Crookston

Ben Woodruff

Eastern Kentucky University

Date Written: April 5, 2016

Abstract

Several African nations rely heavily on coffee exports as a source of national income. Given coffee’s importance to many African economies and the risk that price instability poses to coffee exporters, the World Bank and others have promoted price risk management strategies relying on international futures markets. We test the efficiency of Ugandan coffee markets with respect to international futures markets and test the viability of hedging strategies using these markets. We find evidence of a close relationship between the movements of Ugandan coffee producer prices and futures market prices, supporting the feasibility of hedging price risk in international markets.

Keywords: Efficient Markets, Commodities, Futures Markets

JEL Classification: G14, G15

Suggested Citation

Jackson, John and Woodruff, Benjamin, African Coffee Market Efficiency and International Hedging Viability: Evidence from Uganda (April 5, 2016). Available at SSRN: https://ssrn.com/abstract=2759609 or http://dx.doi.org/10.2139/ssrn.2759609

John Jackson (Contact Author)

University of Minnesota Crookston ( email )

307 Selvig Hall
2900 University Avenue
Crookston,, MN 56716
United States
2182818341 (Phone)

Benjamin Woodruff

Eastern Kentucky University ( email )

521 Lancaster Ave
Richmond, KY 40475
United States

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