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NCDEX launches agri-index future contract GUAREX

  • Published
    19th Aug, 2021

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)

Approach:

  • 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
    • The consumers of the output can minimize the price risk and 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
  • Way forward / Conclusion
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