Price Discovery in Indian Commodity Market A Study of Red Chilli Futures
C.S. Basavaraj, G. Prahlad Chowdri
Abstract
C.S. Basavaraj, G. Prahlad Chowdri
Abstract
The research article tested the efficiency of chilli futures market in India with respect to price discovery and price stabilization. Various tests employed indicate there is long run equilibrium relation exists between spot and future price in chill commodities. Future market for red chilli in India is leading the spot market in impounding future expectations about the future spot price. The results also corroborates that similar relationship is exists in case of other agro commodities as per the studies conducted by others.
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The research article tested the efficiency of chilli futures market in India with respect to price discovery and price stabilization. Various tests employed indicate there is long run equilibrium relation exists between spot and future price in chill commodities. Future market for red chilli in India is leading the spot market in impounding future expectations about the future spot price. The results also corroborates that similar relationship is exists in case of other agro commodities as per the studies conducted by others.
Key concepts: Futures contract, Price discovery, Spot contract, Spot market, Economics, Commodity, Futures market, Commodity market