Pablo Moreno Alemay, of affiliate member, Universidad de la Sabana, and former fellow of the UNCTAD Virtual Institute, organized the First Congress on Derivatives Markets on Agricultural Commodities in Colombia as a result of the research that started when he came to UNCTAD in 2010.
Moreno's research was influenced by the work of Leonela Santana, of UNCTAD's Special Unit on Commodities, who has for several years studied the importance of offering a futures agricultural exchange in emerging countries. Moreno's research focuses on the Colombian scenario for this topic.
The Congress took place June 1, and gathered Colombia's main experts in the field. After a welcome by Gustavo Ramirez Valderrama, Dean of the International School of Economics and Administrative Sciences at the Universidad de La Sabana, Iván Arroyave, Private Secretary of the Ministry of Agriculture of Colombia, delivered the first speech and explained the position of his entity on the creation of this particular market in Colombia.
Other speakers illustrated the benefits of negotiating derivatives products for hedging purposes (minimize risk), related experiences, gave examples of foreign markets, and shared reflections about the correct path for offering these instruments to Colombian users. They included: Gonzalo Delgadillo, CFO of the Agricultural Exchange of Colombia; Diego Jara, Director of the consulting firm, QUANTIL; Oscar Leiva, CEO of the Colombian Clearing House; Maria Nuñez, CEO of the main palm oil Colombian firm, ACEPALMA; and Alejandro Lucio, CEO of the Colombian energy exchange, DERIVEX.
Moreno's research, also presented at the congress, asked a sample of both financial and agro experts in Colombia to rate factors that might explain why this specific market is not a reality in the country. Is it because of the technology used in the Agricultural Colombian Exchange? Or is there a fear of low volume? Does the legal framework of Colombia prevent its negotiation? Do Colombian users consider it high risk to trade derivatives instruments? Would the intervention of the Government be a reason too? Or is it because of a lack of education in this subject? Nearly 75 percent (the highest percentage) of respondents considered that a lack of awareness was a primordial factor to explain why these financial instruments are not offered in Colombia. Based on the findings, the Congress constituted a good step to work on this limitation.
Almost 200 participants, including bankers, traders, practitioners, lecturers and students, filled the auditorium and showed great enthusiasm for the presentations which portrayed the idea of a derivatives market on agricultural commodities in Colombia as an opportunity for the sector. The event was a success and Moreno is already planning the second Congress, which will be held next year.