Improving Agricultural Market Performance:
Developing Agricultural Market Information Systems
46
the future are described as futures markets. Futures Contracts have a future expiry date and
counterparties have an obligation to honour the position at the traded price. These trade
contracts tend to be used to manage price risk (i.e. the risk that the value of the underlying asset
will change unexpectedly in the future).
Figure 13: JSE Electronic Notice Displaying Commodity Prices
Source: Onumah and Aning (2009)
Dissemination of reliable market information is critical to the operations of the exchange. This
includes publishing price data through electronic notice boards as shown in Figure 13. The
information is also disseminated via the JSE website and email alerts to registered parties. This
type of price information published by exchanges such as JSE differs significantly from what the
other MIS platforms report. Whereas in the case of the latter the price information is based on
interviewing market actors who may be biased in reporting, exchanges report actual
transparently-discovered prices on a real-time basis. Sometimes exchanges also report on prices
in major terminal markets for the commodities they trade, for instance, parallel prices on the
Chicago Board of Trade. This enables market players to analyse relevant trends. It should be
noted that market players do not rely exclusively on reported price information in making
market decisions. They tend to consult other sources of information and data which can
influence market developments, including reports published by the south Africa Grain
Information System or SAGIS (Figure 14).