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INFLUENCE OF FUTURES TRADING ON SPOT PRICES OF DRY CHILLI: AN ECONOMETRIC ANALYSIS

KrishiKosh

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Title INFLUENCE OF FUTURES TRADING ON SPOT PRICES OF DRY CHILLI: AN ECONOMETRIC ANALYSIS
 
Creator PRASHANT, G. TUKKAPPANAVAR
 
Contributor SURYAPRAKASH, S
 
Subject marketing, economics, markets, chillies, diseases, commodity markets, exports, biological phenomena, area, productivity
 
Description The history of futures trading in commodities dates back to the later part
of 19th century. Futures trading in chilli was introduced in NCDEX from
2005.India is the largest producer and consumer of chilli among other major
producers in the world. India contributes about 36 per cent to total world
production and occupies the first position in terms of international trade by
exporting 20 per cent of total production. This study is a modest attempt to
investigate the variability of spot and futures, integration and interrelationships
between spot and futures prices of chilli. Apart from secondary data, 20 farmers
and 50 traders were interviewed to know their awareness about futures trading.
The Coefficient of variation of spot and Futures was almost the same. The cointegration
of spot and futures markets could be established for the two cases,
which showed through same order of integration I(1) implying that there exists
a long run price equilibrium relationship between these prices. In NCDEX
market, chilli futures was leading spot prices by two days and spot price in turn
lead futures. None of the farmers and 44 per cent of traders were aware of
futures trading. The strong interdependence between spot and futures prices
reveals that futures prices provide transparency for spot price determination.
So the input from futures prices should be considered while making policies
regarding price regulation. There is a need to popularize participation of farmers
and traders in futures trading.
 
Date 2016-11-15T10:48:05Z
2016-11-15T10:48:05Z
2012-09-11
 
Type Thesis
 
Identifier Th-10413
http://krishikosh.egranth.ac.in/handle/1/85543
 
Language en
 
Format application/pdf
 
Publisher University of Agricultural Sciences GKVK, Bangalore