Post by Sapphire Capital on Aug 21, 2008 23:02:24 GMT 4
Dynamics of Spot and Future Markets in Indian Wheat Market: Issues and Implications
Ashutosh Roy
Deutsche Bank AG - Risk Management (DBOI)
July 26, 2008
Abstract:
In this paper author has presented a look on the wheat market in context of short run dynamics of prices, market arrival, inventories and the role of future market for coping up with highly volatile spot market. Over the period the variability in the wheat market has increased both in terms of market arrival of wheat and spot prices. In the basic framework of CAP (common Agricultural Policy for European Union 2002) , the need for price risk has clearly identified there and role of futures market along with many other price risk mitigating tool has evolved and have been accepted to cope with increasing variability in the spot market . In similar type of macroeconomic environmental setting and expected reforms, India is also experiencing the high and gradually increasing variability in price and arrival of wheat. In compliance of WTO, this variation is going to increase radically in the future. The basic reasons of variability as we know are natural vagaries and seasonality of arrival, apart from these reasons the impact of international market movement and domestic level hoarding has also been reported in many research articles
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1178762_code1039040.pdf?abstractid=1178762&mirid=4
Ashutosh Roy
Deutsche Bank AG - Risk Management (DBOI)
July 26, 2008
Abstract:
In this paper author has presented a look on the wheat market in context of short run dynamics of prices, market arrival, inventories and the role of future market for coping up with highly volatile spot market. Over the period the variability in the wheat market has increased both in terms of market arrival of wheat and spot prices. In the basic framework of CAP (common Agricultural Policy for European Union 2002) , the need for price risk has clearly identified there and role of futures market along with many other price risk mitigating tool has evolved and have been accepted to cope with increasing variability in the spot market . In similar type of macroeconomic environmental setting and expected reforms, India is also experiencing the high and gradually increasing variability in price and arrival of wheat. In compliance of WTO, this variation is going to increase radically in the future. The basic reasons of variability as we know are natural vagaries and seasonality of arrival, apart from these reasons the impact of international market movement and domestic level hoarding has also been reported in many research articles
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1178762_code1039040.pdf?abstractid=1178762&mirid=4