Impact of Weather on Agriculture Commodity Market and the Price Discovery: An Empirical AnalysisJournal: Millennium Journal of Humanities and Social Sciences (Vol.2, No. 1)
Publication Date: 2021-01-31
Authors : Suraj. E. S Ojasvi Gupta;
Page : 60-70
Keywords : volatility; future market; derivatives;
This paper focused on studying the agricultural commodity prices in India and it's extreme volatility due to many reasons such as government interference, growth, market forces factors, regular floods and droughts, transport and warehousing problems, etc. These are contributing factors to demand fluctuations. In this case, the future market plays an important role in the economy. The demand for commodity futures has three particular economic functions: price discovery, price risk management, and price volatility. The future market plays a key role in the process of price discovery. The main aim of this system is to regulate prices to minimize uncertainty, to provide price signals to market traders for futures spot prices through the price discovery phase. So, this study emphasized the role of the derivative market in reducing the volatility of agricultural commodity prices in the Indian market.
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