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Price Discovery in some Primary Commodity Markets in India

Author

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  • Raushan Kumar

Abstract

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 the focus on the price discovery role of futures markets. Employing daily price data for nine crops for period 2009-2014, it is found that strong causation running from futures to spot prices. Since spot prices impinge on the storage and cropping pattern decisions of farmers, the results imply that providing information on futures price to farmers on a daily basis would enable them to take more efficient decisions in the present.

Suggested Citation

  • Raushan Kumar, 2017. "Price Discovery in some Primary Commodity Markets in India," Working Papers id:12203, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:12203
    Note: Institutional Papers
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    Cited by:

    1. Raushan Kumar, 2021. "Predicting Wheat Futures Prices in India," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 28(1), pages 121-140, March.
    2. Muneer Shaik & Abhiram Kartik Lanka & Gurmeet Singh, 2021. "Analysis of lead-lag relationship and volatility spillover: evidence from Indian agriculture commodity markets," International Journal of Bonds and Derivatives, Inderscience Enterprises Ltd, vol. 4(3), pages 258-279.

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