Volume : V, Issue : IV, April - 2016

PRICE DISCOVERY IN COMMODITY FUTURE MARKET: A CASE STUDY OF RUBBER

Ranjini S. Nambiar, Prof. P. Balasubramanian

Abstract :

 Rubber is an elastic hydrocarbon polymer that is derived from latex of some plants. The collection of the latex is called tapping. Rubber tree or Para tree is Hevea asiliensis which is from family Euphorbiaceae and is the most important source of Natural Rubber. It originates from Amazon forests, though it derives its name from Para, one of the states of Brazil. In a competitive environment, where supplies are uncertain and prices frequently move up and down, there is a need for protection from losses. There are various ways to cope with this problem. Apart from increasing the stability of the market, various participants in the farm sector can better manage their activities in an environment of stable prices through derivative markets. Futures trade assumes significance in a volatile ready market and price risk management because of the price discovery. The study was undertaken with the objectives of analysing the price behaviour in Spot and Future market for Rubber, to examine the efficiency of price discovery in Indian Rubber market and to compare the price discovery during pre recession and post recession. For this purpose daily price data of rubber futures and spot markets were collected during the year 2004–2014 and analysed, using descriptive mean, variance and Vector Auto Regression model.

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Article: Download PDF   DOI : 10.36106/ijsr  

Cite This Article:

RANJINI S. NAMBIAR, Prof. P. BALASUBRAMANIAN PRICE DISCOVERY IN COMMODITY FUTURE MARKET: A CASE STUDY OF RUBBER International Journal of Scientific Research, Vol : 5, Issue : 4 APRIL 2016

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