The Income Model As A Sales Strategy For Basic Commodities: The Case Of Cameroonian Cocoa and Coffee Cooperatives
This article proposes the income model as a commodity price risk hedging strategy to producers for which current models do not apply. It uses the theory of game and multiple regressions and ARCH processes. Data was collected from ICCC. The results show that income is explained by future prices and by 25% of the price differential. This model is more stable and less constraining as existing hedging models. It’s one of solution for commodity price risk hedging. However, it follows the same objective as other price risk management models: the reduction of price fluctuations.