An exploration into the efficiency of agricultural commodity futures markets in India
Student name: Ms Kavitha Srikanth
Guide: Dr Nandan Nawn
Year of completion: 2018
Host Organisation: Observer Research Foundation, Kolkata
Supervisor (Host Organisation): Dr Nilanjan Ghosh
Abstract: One of the market instruments believed to be of use to real market players in order to protect against commodity price volatility is said to be the futures contract. For the real market players to benefit from being part of the market- the futures market needs to perform its functions of price discovery and risk management efficiently. The study finds that in conflict to popular belief and economic theory, the futures market is inefficient in terms of price discovery in comparison to the physical market even for the most liquid agricultural commodities. This helps provide a more qualified understanding of the relationship between the two markets and helps us to question the validity of a few fundamental „facts‟.
