While MIFID II is set to improve financial market transparency and increase reliability of the available information, there are still issues of liquidity and position limits that have to be addressed. In Agri commodities trade there is one most vulnerable part of the society – the farmers, who are the producers of these commodities. With Common Agricultural Policy being European Farmer’s safety net, there is still a need for new risk management tools that will strengthen market resilience and allow European Agri-food industry to perform on the highest possible level. How would the best intentions of MIFID II affect farmers, farmer’s cooperatives and their ability to be competitive on the global market?
To answer this question and a number of other related questions we have addressed to Pekka Pesonen, Secretary General, Copa-Cogeca who is the one of the top world experts in agriculture. Having been a farmer himself for many years, he has been a head for over 10 years of Copa – Cogeca – a powerful and most numerous European umbrella organization for farmers’ and their cooperatives. We asked Pekka Pesonen the following questions and in the video below you can find his answers:
EU commodities derivative trading market worth is estimated by ESMA to be around 70 trillion Euros in 2016, what is the share of agricultural commodities in this market?
How the positions limits will affect the agricultural commodities trading on and off-exchange? Does the limits applicable for securitized derivatives?
Are these rules applicable only to EU investment companies or they are equally valid for non-EU companies trading EU agricultural commodities derivatives?
Can you say that the application of these limits will boost the agricultural commodities trade in EU or it on contrary will have a negative impact on it?
The new MIFID 2 rules will definitely manage the market volatility by preventing extreme prices’ fluctuations how it can affect the following groups: agricultural commodities producers, traders and commodities’ processors (like flour companies)?
Do you see any connection between MIFID 2, CAP and EU agricultural performance?
How can European farmers / cooperatives take advantage from MIFID 2?
Especially now when a number of free trade deals were signed between EU and Canada, Japan and a some are about to be signed will MIFID 2 affect the EU agricultural market attractiveness?