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Futures Markets in Indian Agriculture and its Impact on Production and Prices

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Publication date
26/03/2010
Number of Pages
9
Language:
English
Type of Publication:
Articles & Journals
Focus Region:
Asia and the Pacific
Focus Topic:
Market / Trade
Type of Risk:
Market-related
Type of Risk Managment Option:
Risk assessment
Commodity:
Crops
Author
K. Elumalai, N. Rangasamy, R.K. Sharma
Organization
Indian Journal of Agricultural Economics

Commodity futures markets play an imporant role in price discovery, the information on which helps the producers plan their activities on production, processing, storage, and marketing of commodities. It is generally argued that price discovery is more efficient in futures markets than spot markets (Brockman and Tse, 1995; Yang and Leatham, 1999). The availability and effective dissemination of information helps to stabilize and decreases spot price volatility. Thus, futures trading infuse efficiency in the functioning of a commodity market.