Credit points: 15

Subject outline

The subject introduces concepts of agribusiness, idealistic product differentiation marketing and the global agribusiness environment. Risk is examined and the need for forward markets to offset this risk is explained. Problems with supply chain integration will be detailed, which requires parallel markets to offset price risk but with associated trade-offs and risks. Strategies to manage both price and currency risk will be evaluated. Topics include the market price mechanism, commercial trade markets, characteristics of forward markets, identifying market position and calculating exposure through position valuation, risk transfer mechanisms, establishing risk management objectives, problems with forward contracts under high risk, futures hedging, basis risk, hedging using options, over-the-counter bank pricing products, currency risk management, developing tactics in decision-making, financing commodity inventory and managing commodity and financial risks within the organization.

FacultyFaculty of Science, Tech & Engineering

Credit points15

Subject Co-ordinatorJohn Williams

Available to Study Abroad StudentsYes

Subject year levelYear Level 3 - UG

Exchange StudentsYes

Subject particulars

Subject rules



Incompatible subjects FIN3DER

Equivalent subjectsN/A

Special conditionsN/A

Learning resources


Resource TypeTitleResource RequirementAuthor and YearPublisher
ReadingsPrescribed pre-reading: Chapters 1, 2, 3, 5, 7 & 10 of: Competition and Efficiency in International Food Supply Chains - Improving Food SecurityPrescribedWilliams, John, 2012EARTHSCAN-ROUTLEDGE, UK.
ReadingsPrescribed text: Agricultural Price Risk Management - The Principles of Commodity TradingPrescribedWilliams, John and Bill Schroder, 1999OXFORD UNIVERSITY PRESS, MELBOURNE.

Subject options

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Start date between: and    Key dates

Melbourne, 2014, Week 09-15, Day


Online enrolmentYes

Maximum enrolment sizeN/A

Enrolment information

Subject Instance Co-ordinatorJohn Williams

Class requirements

One 5.0 days lecture per study period and delivered via face-to-face.
"26 Hours of blockmode lectures"

Nine 1.0 hours tutorial per study period and delivered via face-to-face.
"9 hours of blockmode tutorials"

One 3.0 hours tutorial per study period and delivered via face-to-face.
"Revision tutorial during the semester"


Assessment elementComments%
One written 2-hour examination60
One written in-class test - approx. 500 words10
One written report (hedging exercise) - approx. 1500 words20
One written report (trading account exercise) - approx. 500 words10