Role of Electronic Warehouse Receipt System in Development of Commodity Exchanges: An Assessment for Turkey

Commodity exchange is a centralized platform where buyers and sellers reduce transaction costs by carrying out commodity transactions under a set of clearly defined rules. Institutional mechanisms which commodity exchanges offer to reduce the transaction costs are stated as central trading platform, central counterparty service, central clearing and settlement service and integration with licensed warehousing and electronic warehouse receipt (EWR) system within the framework of Transaction Cost Theory. Although the literature contains some studies coping with the analysis of commodity exchange system in Turkey, little attention has been paid to mentioned institutional mechanisms by a holistic approach. This article tries to fill this gap by revealing the development of commodity exchange system in Turkey and evaluating it especially with regards to integration with licensed warehousing and EWR system in the consideration of Transaction Cost Theory. In the light of the findings obtained, the establishment of Specialized Commodity Exchange is highlighted for the deepening of the commodity markets in Turkey