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Unit Overview


This unit equips students with knowledge and skills necessary to understand economic policies used in international agricultural trade and management of price risk using commodity derivatives. The unit is taught in two modules. The first module introduces students to international agricultural trade by focusing on why trade occurs, trade theories with applications to agriculture, and public policies and government programs affecting agricultural trade. The second introduce students to the purpose, operation, and use of commodity futures contracts and options.

At the end of the unit, the students will have developed an appreciation and understanding of the economics principles that underpinning international trade policies, including (a) determinants of trade patterns between nations; (b) gains from international trade; (c) effects of international trade on an economy; (d) winners and losers from international trade policies; (e) main arguments for and against protectionism; and (f) process and implications of international economic integration. They will also understand (g) how to hedge price risk using futures and option contracts.

6 points
(see Timetable)
Semester 1UWA (Perth)Face to face
Details for undergraduate courses
  • Level 3 core unit in the Agricultural Science; Agricultural Science and Technology; Agricultural Technology; Agribusiness and Agricultural Science; Agribusiness major sequences
  • Level 3 elective

Students are able to (1) understand the basic trade theories and their prediction of the pattern of trade between nations; (2) evaluate the impact of different domestic and international trade policies to society, including identifying winners and losers in international trade; (3) understand the basic working of commodity futures and options markets for hedgers and how these are used by agricultural producers to manage price risk; and (4) develop the ability to manage price risk using different hedging and options strategies.


Indicative assessments in this unit are as follows: (1) assignments and (2) examination. Further information is available in the unit outline.

Student may be offered supplementary assessment in this unit if they meet the eligibility criteria.

Unit Coordinator(s)
Associate Professor Michael Burton and Dr Amin Mugera
Unit rules
Successful completion of
48 points in your chosen degree
Contact hours
lectures: 3 hours per week
tutorials: 2 hours per week

Carter C. A. Futures and Options Markets: an Introduction: Prentice-Hall 2003

Koo, W. W. and Lynn, K. P. International Trade and Agriculture: Theories and Practices: Wiley-Blackwell 2005

  • The availability of units in Semester 1, 2, etc. was correct at the time of publication but may be subject to change.
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  • Unit readings, including any essential textbooks, are listed in the unit outline for each unit, one week prior the commencement of study. The unit outline will be available via the LMS and the UWA Handbook one week prior the commencement of study. Reading lists and essential textbooks are subject to change each semester. Information on essential textbooks will also be made available on the Essential Textbooks. This website is updated regularly in the lead up to semester so content may change. It is recommended that students purchase essential textbooks for convenience due to the frequency with which they will be required during the unit. A limited number of textbooks will be made available from the Library in print and will also be made available online wherever possible. Essential textbooks can be purchased from the commercial vendors to secure the best deal. The Student Guild can provide assistance on where to purchase books if required. Books can be purchased second hand at the Guild Secondhand bookshop (second floor, Guild Village), which is located on campus.
  • Contact hours provide an indication of the type and extent of in-class activities this unit may contain. The total amount of student work (including contact hours, assessment time, and self-study) will approximate 150 hours per 6 credit points.