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Futures Commodity Market and Price Gains in Agriculture – A Case Study of Wheat

Futures Commodity Market and Price Gains in Agriculture – A Case Study of Wheat. PANKAJ KUMAR MBA (AGRI-BUSINESS) Faculty of Management Studies Banaras Hindu University Varanasi Email-arpanpankaj@gmail.com. Flow of presentation. Background of Project Objective of Study

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Futures Commodity Market and Price Gains in Agriculture – A Case Study of Wheat

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  1. Futures Commodity Market and Price Gains in Agriculture – A Case Study of Wheat PANKAJ KUMAR MBA (AGRI-BUSINESS) Faculty of Management Studies Banaras Hindu University Varanasi Email-arpanpankaj@gmail.com

  2. Flow of presentation • Background of Project • Objective of Study • Research Methodology • Findings • Conclusion • Recommendation

  3. Background of Project • Price risk of agriculture. • It has been realized by policy maker that introduction and proliferation of futures trading will benefit Indian agriculture. • NABARD trying to pass on the benefits of futures commodity market to Indian farmers.

  4. Objective of the Study • To study the existing marketing channel of wheat in Uttar Pradesh. • To study the relationship between the spot and future prices of wheat. • To study the futures price dissemination through different sources.

  5. Research Design • Nature of Research Exploratory and quantitative • Data Collection

  6. Questionnaire Used • Structured, open ended and non disguised. • Sampling Technique • Judgmental and Snowball Sampling

  7. Study Area • Shahjahanpur, Bareilly, Hapur, Muzaffarnagar, Meerut • Statistical Tools • Correlation, Standard Deviation, Weighted Average, Mean, Line Graph, Bar Graph • Limitations of Study • The accuracy of the findings mostly depends on willingness of the respondents. • Econometric analysis futures and spot prices are not conducted. • Only five districts of Uttar Pradesh have been selected for the study

  8. Marketing Channels of wheat

  9. Correlation (r) Analysis

  10. Quarterly ‘r’ Analysis of Spot & Futures Prices

  11. Price Fluctuation Trend

  12. Analysis of Standard Deviation

  13. Spot Price Information

  14. Access to futures Price Sources

  15. Price Dissemination

  16. Conclusion • Farmers are at the mercy of adathiyas of Mandi. • Futures and spot market are highly correlated. • Spot and futures price showing similar fluctuation trend it means that both the markets are interrelated.

  17. Cont… Study don’t find any type of speculative activity in relation to wheat price. Different sources having futures price information is not accessible by the farmer.

  18. Recommendations • There is need to reform the marketing channel so that farmers will get fair price of their wheat produce. • As farmers are more dependent on adathiyas from sowing to selling, there is need to break this relationship by providing special loan to interested farmers. • Strengthening of warehouse receipt finance so that it helps the farmers to become more responsive to market opportunities.

  19. Cont… • Involvement of private players as an aggregator who can do the futures trading of wheat on behalf of farmers. • An efficient futures market can ensure better return to farmers, reducing the need for government intervention through price support & subsidies so, it must be encouraged.

  20. Cont…. • There is need to create awareness among the farmers about the benefits of futures commodity market. • Easy availability of futures price movement of agri commodities for farmers, this information helps the farmers in making decision about which crop to grow.

  21. Thank You

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