By distributing risks more broadly among the major players - banks, insurance companies, hedge funds, and private asset managers - these transactions would seem almost by definition to add to the diversity and strength of financial markets and reduce risk concentrations. By their design, derivative instruments segment risk for distribution to parties most willing to accept them.
At the same time, the BSE outbreak in the US, which was traced back to a Canadian herd, has resulted in North American beef being virtually shut out of the world market. With demand for beef from North Asia continuing to be strong, world beef prices have risen sharply.