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What are the proponents and contradictions of hedging

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a) A palm oil producer expects to have 100,000 tons of crude palm oil (CPO) to sell in six months. Each CPO futures contract is for the delivery of 25 tons. How can the palm oil producer use the contract for hedging? From the producer's viewpoint, what are the proponents and contradictions of hedging? (insert your answer here).

b) It is said that "Speculation in futures markets is pure gambling. Therefore, it is not in the public interest to allow speculators to trade in the futures exchange". Using your own words comment on this statement. (insert your answer here).

Reference no: EM132999408

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