Climatic changes and weather risk management in agriculture

Abstract

Despite the constant development of the system of forecasting unpredicted events and risks, there are many economic sectors where revenues depend directly on the wheather variables. Risk management is a continuous process whose goals are to predict and stabilize cash flows and maximize profit of a company. Weather derivatives are special form of financial risk transfer instruments and they are associated with specific weather events or conditions that directly or indirectly affect the third party outcomes. Unlike traditional insurance contracts, weather derivatives are realized when the agreed time variable exceeds a predefined value for a specific period. Therefore, financial derivatives make more probable the uncertainty of future operations in terms of present actions. Market for the weather derivatives is the youngest and also the fastest growing market for financial derivatives. Insurance against weather risk primarily was applied in the energy sector. Market development and the ability to trade with weather derivatives, enabled the development of new types of weather derivatives offered to companies. These new types of derivatives provide protection not only from changes in temperature, but also from rainfall, wind intensity, humidity and pressure, cloudiness, snow melting, sea temperature, wave height etc. This paper presents a definition, classification and historical development of weather derivatives. The aim is to emphasize characteristics of this type of derivatives and their distinctive features related to weather conditions and variables. In this paper the focus is on weather derivatives used by agriculture industry whose results of operations mainly depend on weather variables.

I pored stalnog razvoja sistema predviđanja i zaštite, gotovo da ne postoji privredna grana u kojoj prihodi u manjoj ili većoj meri ne zavise od neke komponente vremenskih prilika. Upravljanje rizikom je kontinuiran proces koji ima za cilj lakše predviđanje i stabilizaciju novčanih tokova i uvećanje profita u kompaniji. Vremenski derivati, kao poseban oblik finansijskih instrumenata transfera rizika, povezani su s određenim vremenskim događajima i u ponudi su na tržištu radi zaštite od unapred definisanih vremenskih ishoda. Za razliku od klasičnih ugovora o osiguranju, oni se realizuju kada ugovorena vremenska varijabla premaši definisanu vrednost u određenom vremenskom periodu. Dakle, finansijski derivati neizvesnost budućeg poslovanja svode na 'sadašnju' poznatu ravan. Tržište vremenskih derivata je najmlađe, a ujedno najbrže rastuće tržište finansijskih derivata. Osiguranje od vremenskih rizika prvenstveno je bilo namenjeno energetskom sektoru. Razvoj tržišta i mogućnost trgovine vremenskim derivatima omogućili su razvoj novih vrsta vremenskih derivata, koji su se mogli ponuditi privrednim subjektima iz drugih grana, pružanjem zaštite ne samo od promena temperature već i od padavina, intenziteta vetra, vlažnosti i pritiska vazduha, oblačnosti, topljenja snega, temperature mora, visine talasa i drugo. U radu su izvršeni definisanje, klasifikacija i razvoj vremenskih derivata, s ciljem da se ukaže na prednosti ove vrste finansijskih derivata, u čijoj su osnovi ugovora indeksi vezani za vremenske prilike. Zbog svoje specifičnosti, posebno su analizirani vremenski derivati u poljoprivredi, kao delatnosti čija je aktivnost u najvećoj meri vezana za otvoreni prostor i zavisnost od velikog broja komponenti vremenskih prilika.