SUMMARY
The liberalization of trade and reduction of government support to the agricultural sector has created fertile ground for the establishment of new commodity exchanges (which can trade spot commodities, forward contracts, warehouse receipts, and futures and options contracts), and the further development of existing ones. This paper describes the key elements that determine the likelihood of success for a commodity-exchange initiative. It gives the strategic choices that an exchange can consider, and discusses what type of exchange and what type of contracts would function best under certain specific conditions. It then discusses the way that exchanges can be organized: their ownership structure, clearing operations, and so forth. Regulation, in terms of both the framework to be provided by the Government and the regulatory services to be provided by the exchange, is discussed at some length. Finally, some of the practical elements of exchange and contract development are described, from the physical layout of the exchange to the timing of a contract launch. [in English only]
