A STUDY OF PROSPECTS OF AGRICULTURAL

“A STUDY OF PROSPECTS OF AGRICULTURAL COMMODITY FUTURES IN
INDIA – A CASE OF TURMERIC”

Prof Gurbandini Kaur,
All India Management Association (AIMA),
Email: [e-mail]

Abstract

A commodity exchange is defined as a market where buyers and sellers trade commodity linked contracts on the basis of terms and conditions laid down by Commodity Exchange
(UNCTAD, 2007). At present, there are 23 exchanges operating in India and carrying out futures trading activities in as many as 146 commodity items.
As per the recommendation of the Forward Market Commission (FMC), the Government of
India recognized the National Multi-Commodity Exchange (NMCE), Ahmedabad, MultiCommodity Exchange (MCX) and National Commodity and Derivative Exchange
(NCDEX), Mumbai, as nation-wide multi-commodity exchanges. NMCE commenced in
November 2002 and MCX in November 2003 and NCDEX in December 2003. In an emerging market context like India, the growth of capital and commodity future market would depend on effectiveness of derivatives in managing risk. There have been extensive research and commodity future markets in several countries across the world.
However, reviews of literature on commodity future markets indicate that while there has been research on technical questions, the research has had inefficient economic content.
Thus our paper focuses the studying correlation between spot and future price for commodity market, turmeric in particular.
Keywords: national Multi-Commodity Exchange, Multi-Commodity Exchange, National
Commodity and Derivative Exchange, Spot Price, Future Price, Arbitrage,
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1. INTRODUCTION

A commodity exchange is defined as a market where buyers and sellers trade commodity linked contracts on the basis of terms and conditions laid down by Commodity Exchange
(UNCTAD, 2007).
The history of organized commodity derivatives in India goes back to the nineteenth century when the Cotton Trade

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