Agri-commodities future contracts market in India is still in its nascent stage. Analyze the role of agri-commodities future markets in the agriculture sector of India.(250 words)
Introduce by giving a definition of Agri-commodities future contracts
Discuss the role of this market in the agriculture market in general. Following points can be used:
By using indications given by the commodity markets,farmers, growers, or producers can minimize the price risk and avoid a supply gut
Theconsumersof the output canminimize the price riskand ensure that the demand pressure is appropriately capped.
While ensuring price risk mitigation and remunerative returns, these markets also contribute to scaling down the downside risks associated with agricultural lending and, thereby,facilitate the flow of credit to agriculture.
Discuss steps taken by the government in promoting this market:
Example: recently introduced GAUREX and SOYDEX indices