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Asian Journal of Business Management & Development Research: A peer Review Quarterly Online Journal
COPYRIGHT 2016
VOLATILITY OF COMMODITY TRADING MARKET IN
INDIA
AVINASH JHA
DEPT. OF ECONOMICS COLLEGE OF MANAGEMENT
AGRA (U.P.) ABSTRACT
For the present study, one agricultural commodity has been selected due to
higher volume. Earlier this commodity was banned by Forwards Market
Commission in March 2012 for future trading due to sharp rise in prices but
now future contracts of Guarseed has relaunched for trading from May 2013
onwards.
INTRODUCTION
RESEARCH METHODOLOGY
Research Methodology is the process which is used to collect data from various
sources for making decisions. There are mainly four major National Level
Exchanges in India namely NMCE, NBOT, NCDEX and MCX but NCDEX is
selected for the study because volume of selected commodity is traded greater
than traded on other exchanges. The research design for this study is analytical
in nature based on available secondary data. Secondary data is collected from
other researches, periodicals, magazines, news papers, journals and Internet by
the researcher. Secondary data on daily futures prices and volume of trade on
exchanges is collected from the official web site of NCDEX for the period from
Asian Journal of Business Management & Development Research: A peer Review Quarterly Online Journal
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14 May 2013 to 19July 2013. Observations of volume and future price of the
commodity is taken for July 2013 contract as FMC allowed future trading in
Guarseed from May 2013 onwards.
PROBLEM STATEMENT
For the present study, one agricultural commodity Guarseed has been selected
due to higher volume.Earlier this commodity was banned by Forwards Market
Commission in March 2012 for future trading due to sharp rise in prices but
now future contracts of Guarseed has relaunched for trading from May 2013
onwards.
TOOLS & TECHNIQUES
Concurrent deviation method and correlation coefficient are used for analyzing
the collected data.
DATA ANALYSIS & INTERPRETATION
Following table shows the data of volume, future close prices and spot prices of
Guarseed for July future contract. Time period has been taken from 14 May
2013 to 19 July 2013 for two months for analyzing the correlation between
future prices and volume, future and spot prices as well as impact of Guarseed
future prices on traded volume by applying concurrent deviation method and
correlation coefficient respectively.
Table No.1 : Future Closing prices and volume of Guarseed for July 2013
Contract
Asian Journal of Business Management & Development Research: A peer Review Quarterly Online Journal
COPYRIGHT 2016
Asian Journal of Business Management & Development Research: A peer Review Quarterly Online Journal
COPYRIGHT 2016
Asian Journal of Business Management & Development Research: A peer Review Quarterly Online Journal
COPYRIGHT 2016
Asian Journal of Business Management & Development Research: A peer Review Quarterly Online Journal
COPYRIGHT 2016
Asian Journal of Business Management & Development Research: A peer Review Quarterly Online Journal
COPYRIGHT 2016
Asian Journal of Business Management & Development Research: A peer Review Quarterly Online Journal
COPYRIGHT 2016
Asian Journal of Business Management & Development Research: A peer Review Quarterly Online Journal
COPYRIGHT 2016
CONCLUSION
On the basis of above study, we conclude that price fluctuations do not have any
impact on traded volume. Future prices are dependent upon current demand and
supply of Guarseed in various mandis. According to market conditions, spot and
future prices of agricultural commodities varies. It has also been shown in the
results that spot and future prices of selected agricultural commodity moves in
the same direction considering the physical stocks.
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Asian Journal of Business Management & Development Research: A peer Review Quarterly Online Journal
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