Risk management: analysis of the financial derivatives by agricultural cooperative in Paraná

Abstract

In the past decade, studies related to the use of risk management tools, such as derivatives, became recurrent although there are still a number of doubts with respect to the costs and benefits of such use. Cooperatives are within an environment where uncertainty is present, together with risk, and farming commodity production and price variation stand out. The need for effective risk management in pursuit of an optimal hedge strategy so as to maximize the tradeoff between risk and return rises from that. This article investigates risk management in a sample of farming cooperatives in the state of Paraná. With respect to the methodology approach, procedures from a descriptive research by applying a questionnaire to the financial managers of the farming cooperative samples constituting this study were used. Evidence suggests that financial managers of farming cooperatives manage their exchange rate exposure with derivatives, followed by the interest rate of commodities and assets, being mostly concerned with institutional factors rather than with the financial-economic ones in spite of the Brazilian market volatility.