ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Sagging Agricultural Commodity Exchanges

Commodity derivatives have a crucial role to play in managing price risk especially in agriculture dominated economies. However, as long as prices of many commodities are restrained to a certain extent by government intervention in production, supply and distribution, forward and futures markets for hedging price risk in those commodities have only limited practical relevance. A review of the nature of institutional and policy level constraints facing this segment calls for more focused and pragmatic approach from the government, the regulator and the exchanges for making the agricultural futures market a vibrant segment for risk management.

Indian Agricultural Commodity Futures Markets

A large number of agricultural commodities and their byproducts are being traded in several exchanges. Six of these commodities have been traded long enough to enable an assessment of their performance. This paper examines the performance of these six commodity futures. The results indicate that most of these markets are yet to develop fully as efficient mechanisms of risk management and price discovery.
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