Minimum Price Contract

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Minimum Price Contract

A forward contract where the underlying asset is guaranteed to have a minimum price upon delivery. A minimum price contract exists in order to reduce the risk of fluctuations in the forward's price. This is useful for farmers and other producers of commodities, as well as for investors wishing to hedge the risk in their positions.
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Minimum price contracts offer security for many growers and GrainCo has the largest portfolio of wheat minimum price contracts in Scotland.
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