HC Deb 08 March 1990 vol 168 c788W
Mr. Flynn

To ask the Secretary of State for Trade and Industry if he will make it his policy to assess the implications for United Kingdom trade policy and relations with the less developed countries from the introduction of arrangements for traded imports or raw materials and finished goods from less developed countries not to be fixed by the futures markets.

Mr. Redwood

[holding answer 2 March 1990]: The futures markets are of benefit to producers and to those who supply or process raw materials by providing the opportunity for them to reduce the risks associated with future price volatility due to market conditions. Developing countries do not have to deal in these markets if they choose not to. Futures markets themselves do not establish commodity prices. Rather, they provide an estimate of likely future prices which may or may not subsequently turn out to be correct. Prices should be determined by supply and demand in the market. I therefore see no need for the assessment called for by the hon. Member.

I would also refer the hon. Member to a statement on United Kingdom commodity policy made by my hon. Friend the then Minister for Trade, on 21 July 1988, Official Report, columns 781–82.