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Raushan Kumar
 
''Price Discovery in Some Primary Commodity Markets in India''
( 2017, Vol. 37 No.3 )
 
 
With the onset of wide-ranging economic reforms in India in 1991, agents have been exposed to increased price risk in commodity markets. Futures markets are one important instrument for reducing price risk, and in this study we focus on the price discovery role of futures markets. Employing daily price data for nine crops for the period 2009-2014, we find strong causation running from futures to spot prices. Since spot prices impinge on the storage and cropping pattern decisions of farmers, our results imply that providing information on futures price to farmers would enable them to take more efficient decisions in the present.
 
 
Keywords: Futures markets, spot markets, primary commodities, developing country
JEL: G1 - (G11, G13, G13) Portfolios, Investments, Asset and Futures Pricing, Trading Volume & Bond Interest Rates
Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics: General
 
Manuscript Received : Jul 29 2017 Manuscript Accepted : Aug 31 2017

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