Commodity Markets under the Globalization Regime: A Study of the Indian scenario Research Proposal Sumalatha.B.S

Introduction Why this topic? Economics behind the topic Relevance in the current scenario Ongoing issues Scope of the topic under the globalization regime

Study Problem Importance of future market Consequences of crisis Price declines in the international commodities market Why agricultural sector? Focus on the post reform dynamism Why future market important – effect of globalization uncertainties in the output, prices and income Questions arise on how the price fluctuations can be smoothened How the producers can manage the future price crash Understanding the future demand Price volatility and inherent risk involved in the physical trade Uncertainty – both for producers (income) and consumers (cost)

For an individual (price and income risk) and nation as a whole (export earning risk) Mechanism for sharing these risks Changes in supply and demand conditions It is an innovative process under the commodity market

Literature Review McKinnon (1967) – issues with related to the price stabilization Susan Thomas (2003) – debates about the agricultural liberalisation concern, the smoothening of price fluctuation, decision making under the highly uncertain future price Balasundaram (1998) – agricultural sector liberalisation and future market Shah and Thomas(1999, 2000) – agricultural commodities have to develop sophisticated institutional capacity (Newbery and Stiglitz, 1981) - boost to agricultural income stability and growth and opportunities for speculation

Theoretical framework Some micro economic theory with related to this topic Concepts of risks and uncertainty Risks associated with price and income Theories explaining the price volatility and solutions

Objectives of the Study To study on the structure of commodity markets in the globalization regime in India To examine the role of the commodity future markets in the Agricultural commodities by taking some selected products To examine different price mechanism system existing in economy and price mechanism system under future markets

Data Sources Major secondary data sources – reports of NCDE, MCE, NMCEI and RBI International and domestic prices and quantities are available in the UNCTAD commodity price statistics, IFS and IMF

Significance of the Study Overall scenario of commodity market and particularly for agricultural sector Price stablisation and risk management Some policy suggestions