Using Wheat Futures to Stabilize the Cost of Raw Material in Bakery Sector

The article presents the example of using relations between the price of wheat flour sold by the milling companies and the price of wheat futures listed on the FOREX market to protect the companies from bakery sector against adverse price movements of raw material--wheat flour. The paper aims to present a method which can help to reduce risk of changes wheat flour price in the market by using wheat futures traded at FOREX market. For the analysis authors used weekly data since January 2006 until October 2010 about wheat flour price, wheat grain price, wheat futures prices, quotes a currency pair USD/PLN. Wheat flour prices came from studies of the Department of Agricultural Markets, Ministry of Agriculture, and Rural Development in Poland and represented the average sales price of wheat flour by milling companies. Information about wheat futures and quotes a currency pair USD/PLN reflects the actual trading of the FOREX market. Authors used statistical analysis tool for determining the strength of the relationship between the price of wheat flour and the wheat price on the domestic market and the wheat futures price. The correlation coefficient between them was 0.763. For further test authors used seven different options that use future contracts to reduce fluctuations in the flour price which can be used in bakery businesses. These results of research show that someone can effectively use wheat futures contracts listed on the FOREX market to protect the bakery business against adverse movements of wheat flour prices. Application in practice chosen strategies can allow bakery companies to achieve cost advantages by reducing the adverse changes in the wheat flour prices. Chosen strategies are more efficient if the prices of flour in the domestic market are rising. If prices drop down, the effectiveness of using wheat futures contracts was lower. It should be noted that wheat futures contracts are a good tool to achieve cost advantages in the bakery industry, especially when the wheat flour prices are increased on the domestic market.

Development of engineered cementitious composites with local ingredients

In order to reduce the cost of high performance polyvinyl alcohol（PVA） fiber reinforced cementitious material（called engineered cementitious composites,ECC）,a ductile ECC material is developed using domestic PVA fibers along with other local ingredients,such as fly ash,cement and sand.In addition to the economic analysis of ECC,the four-point bending test and the optical microscope are employed to investigate the deflection capacity of ECC,its crack width and the occurrence of the self-healing phenomenon.The experimental results suggest that ECC made with domestic ingredients exhibits larger deformability and the average crack width is controlled around 60 μm.Furthermore,the self-healing behavior is observed in cracks of the specimens after cycles of wet and dry curing.The economic analysis shows that the cost of ECC can be greatly reduced via employing domestic PVA fibers.It is,therefore,feasible to produce low cost ECC material employing domestic PVA fibers,while simultaneously retaining high material ductility.