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“An econometric analysis OF IMPACT of FUTURES TRADING – A study on Cardamom, Potato, Jaggery and Maize” BY BY Dr. P. K. Mandanna Dr. P. K. Mandanna Professor & Head Professor & Head Dept. Ag.Maco & B Mgt Dept. Ag.Maco & B Mgt UAS, Bangalore UAS, Bangalore
Preamble New market formats like direct marketing, contract farming and retail chains are gaining popularity New market formats like direct marketing, contract farming and retail chains are gaining popularity Market access and removal of quotas have enhanced global trade in commodities Market access and removal of quotas have enhanced global trade in commodities Changing food habits and value addition are the drivers of domestic growth Changing food habits and value addition are the drivers of domestic growth
Cardamom Important spice of South India. India produces around 10,000 tons out of World production of 30,000 tons. About 90 per cent is domestically transacted Potato India ranks 4 th in Area and 3 rd in production 25 million tons from1.4 m. ha. World area 19.3 m ha. And 329 m.tons
Jaggery Important cottage industry in Karnataka About 35 % of sugarcane used for jaggery 15 m.tons valued at 1500 crores Maize 11.5 million tons from 11.5 million tons from lakh hectares 75% of the produce is used in poultry feed and 20% for starch extraction
Potato
Jaggery
Maize Maize
Objectives of the Investigation: To study the supply response of selected commodities To study the supply response of selected commodities To study behaviour pattern of arrivals and prices in principal markets To study behaviour pattern of arrivals and prices in principal markets To study the relationship between spot and futures prices To study the relationship between spot and futures prices To document the Perception of growers and traders on Futures trading To document the Perception of growers and traders on Futures trading Strengthening of supply chain Strengthening of supply chain
Detailed Programme of Work 10 years Secondary data on area and production of all the four commodities in India and Karnataka will be collected 10 years Secondary data on area and production of all the four commodities in India and Karnataka will be collected The spot and future prices will be compiled from NCDEX, MCX, & Karvy consultants The spot and future prices will be compiled from NCDEX, MCX, & Karvy consultants The primary data on perception will be obtained from 120 farmers and traders located in principal markets. The primary data on perception will be obtained from 120 farmers and traders located in principal markets.
Analytical tools The data will be analysed using statistical tools Hazell’s decomposition model to study instability in area & production. Hazell’s decomposition model to study instability in area & production. Acreage response models to study supply response. Acreage response models to study supply response. Tabular analysis to study perception. Tabular analysis to study perception. Co - integration technique for spot & futures prices. Co - integration technique for spot & futures prices.
Benefits Benefits Production and Marketing advice to farmers Production and Marketing advice to farmers Developing commodity specific Production and Marketing policy Developing commodity specific Production and Marketing policy To develop commodity specific action plans To develop commodity specific action plans