Transcript Document

Commodity Markets under the Globalization
Regime: A Study of the Indian scenario
Research Proposal
Sumalatha.B.S
Introduction
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Why this topic?
Economics behind the topic
Relevance in the current scenario
Ongoing issues
Scope of the topic under the globalization regime
Study Problem
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Importance of future market
Consequences of crisis
Price declines in the international commodities market
Why agricultural sector?
Focus on the post reform dynamism
Why future market important – effect of globalization
uncertainties in the output, prices and income
Questions arise on how the price fluctuations can be
smoothened
How the producers can manage the future price crash
Understanding the future demand
Price volatility and inherent risk involved in the physical
trade
Uncertainty – both for producers (income) and consumers
(cost)
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For an individual (price and income risk) and nation as a
whole (export earning risk)
Mechanism for sharing these risks
Changes in supply and demand conditions
It is an innovative process under the commodity market
Literature Review
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McKinnon (1967) – issues with related to the price stabilization
Susan Thomas (2003) – debates about the agricultural
liberalisation concern, the smoothening of price fluctuation,
decision making under the highly uncertain future price
Balasundaram (1998) – agricultural sector liberalisation and
future market
Shah and Thomas(1999, 2000) – agricultural commodities have
to develop sophisticated institutional capacity
(Newbery and Stiglitz, 1981) - boost to agricultural income
stability and growth and opportunities for speculation
Theoretical framework
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Some micro economic theory with related to this topic
Concepts of risks and uncertainty
Risks associated with price and income
Theories explaining the price volatility and solutions
Objectives of the Study
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To study on the structure of commodity markets in the
globalization regime in India
To examine the role of the commodity future markets in the
Agricultural commodities by taking some selected products
To examine different price mechanism system existing in
economy and price mechanism system under future markets
Data Sources
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Major secondary data sources – reports of NCDE, MCE,
NMCEI and RBI
International and domestic prices and quantities are
available in the UNCTAD commodity price statistics, IFS and
IMF
Significance of the Study
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Overall scenario of commodity market and particularly for
agricultural sector
Price stablisation and risk management
Some policy suggestions