Commodity Market in India
Commodity Market in India A commodity futures market is a public market where commodities are contracted for purchase or sale at an agreed price for delivery on a specified date. This process of purchase or sale of commodities must be made through an organized exchange broker and the purchase should be made under the terms and conditions of a standardized futures contract (Choudhry 2004). Commodity, besides being a unique hedging instrument, also provides for efficient portfolio management arising from diversification benefits. These benefits result in improved returns to domestic as well as international investors. The commodity futures market furnishes commercial commodity producers and consumers with a way to express price risk to speculators who have no direct commercial concern in the commodities themselves (Silber, 1985). Producers‘hedge price risk by assuming short perspectives in futures contracts on the commodity that they produce. A similar hedge demands consumers
