A Study of Castorseed Futures Market in India

Karande, Kiran

doi:10.2139/ssrn.983342

Cited by 8 publications

(7 citation statements)

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“…Silvapulle and Moosa (1999) and Karande (2006) find that the futures prices of crude oil and castor seed lead spot prices. The most common explanation why a lead-lag relationship between the two markets is observed is that it is less costly for traders to exploit information in the futures market since transaction cost is lower and the degree of leverage attainable is higher.…”

Section: Literature Surveymentioning

confidence: 99%

Price discovery in the Indian gold futures market

Pavabutr

Chaihetphon²

2008

J Econ Finan

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Section: Literature Surveymentioning

confidence: 99%

Price discovery in the Indian gold futures market

Pavabutr

Chaihetphon²

2008

J Econ Finan

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“…Karande (2007) proved that commodity futures market performs the function of price discovery and has proven beneficial to spot market by reducing the spot price volatility. The same is also validated by Sinha and Bhuniya (2011).…”

Section: Review Of Literaturementioning

confidence: 99%

“…Samal et al (2015) studied the turmeric futures from NCDEX and concluded that futures markets of turmeric help to discover prices in the spot markets. Karande (2007) proved that commodity futures market performs the function of price discovery and has proven beneficial to spot market by reducing the spot price volatility. The same is also validated by Sinha andBhuniya (2011).…”

Section: Price Discoverymentioning

confidence: 99%

Indian Agri-Commodities Markets: A Review of Transition Toward Futures

Kar

2021

Journal of Operations and Strategic Planning

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By using indications given by the commodity markets, farmers, growers, or producers can minimize the price risk and avoid a supply gut. The consumers of the output can minimize the price risk and ensure that the demand pressure is appropriately capped. It was in this backdrop that farmers and food grain merchants initiated futures markets in agri-commodities. This article has been successful in documenting the evolution of agri-commodities futures markets in India and their regulatory framework. It also captures the transition toward agri-commodities futures by engaging in a comprehensive survey of extant literature. The market growth analysis indicates that the transition toward agri-commodities futures markets has enabled price discovery and better price risk management. While ensuring price risk mitigation and remunerative returns, these markets also contribute to scaling down the downside risks associated with agricultural lending and, thereby, facilitate the flow of credit to agriculture. Further, they also hold a key role not only in reinvigorating the spot markets but also in triggering the diversified growth of Indian agriculture in line with the consumption pattern. Thus, enabling policies need to be put in place to strengthen the agri-commodities futures markets by streamlining the supply chain.

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“…Lead-lag relationship between spot and futures markets was mixed and wheat futures contracts had low hedging effectiveness. Karande (2006) employed the cointegration technique to study the linkage between Indian castor seeds futures and spot market. They found that there is unilateral causality from futures market to spot market.…”

Section: Review Of Literaturementioning

confidence: 99%

An Empirical Analysis of Market Efficiency and Price Discovery in Indian Commodity Market

Gupta

Choudhary

Agarwal

2018

Global Business Review

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The present article is an attempt to empirically investigate the long-term market efficiency and price discovery in Indian commodity futures market. The study has been conducted with eight commodities which include two agricultural commodities, two industrial commodities, two precious metal and two energy commodities. Sophisticated statistical methods like restricted cointegration and vector error correction model (VECM) are used to analyse the spot and futures prices time series. Restricted cointegration test shows that near-month futures prices for all the commodities are cointegrated with the spot prices but futures prices of all the commodities are inefficient to predict the future spot price. Indian commodity futures market evidenced as the thinly traded market (Kumar & Pandey, 2013, Journal of Indian Business Research, 5(2), 101–121) rejects the null hypothesis of efficiency and unbiasedness for all the eight commodities which reconfirms the result of Fortenbery and Zapata (1997, Journal of Futures Markets, 17(3), 279–301). The presence of short-term biases in the Indian futures market is evidenced in the results of VECM model which indicates the presence of informational efficiency. The statistically significant value of past prices of spot and futures confirm the short-term inefficiency and biasedness. The significant value of error correction term (ECT) of futures prices suggests that commodity futures are the most important indicator of commodity price movements. The important implication of the results is for market traders. They can use the futures prices to discover the new equilibrium and earn profits by transmitting it to the spot market. The better understanding of the interconnectedness of these market would be useful for policymakers who try to establish stability in the financial markets.

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A Study of Castorseed Futures Market in India

Cited by 8 publications

References 130 publications

Price discovery in the Indian gold futures market

Price discovery in the Indian gold futures market

Indian Agri-Commodities Markets: A Review of Transition Toward Futures

An Empirical Analysis of Market Efficiency and Price Discovery in Indian Commodity Market

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