An Empirical Study of Market Efficiency of Select Agricultural Commodities Futures in India

Abstract

In the wake of globalization and surge in global uncertainties, the prices in commodity markets have shown wide fluctuations. Commodity price volatility is the most critical issue being faced by the producers of primary commodities. The instability in prices is largely attributed to demand and supply discrepancies that stem from business cycles (as in case of metals, energy products and agricultural commodities), unforeseen weather conditions or political upheavals. The low prices for basic commodities limit the income of farmers/ small producers whereas high volatility of prices makes it very difficult for them to optimize the use of their income (Morgan 2000)1. newline