Farmers_awaeness_about_commodity_Trading.pptx

7/28/2019 Farmers_awaeness_about_commodity_Trading.pptx

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Part- I (Introduction)

What is Commodity?

What is a commodity exchange?

What is Commodity Futures?

History of Commodity Market in India

Legal framework for regulating

commodity futures in India

Commodities Traded

International Commodity Exchanges


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Cont

Part- II

Research: Research Objective & Sub-objective

Research Process

Data Interpretation & Analysis

Findings & recommendation

Conclusion


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What is Commodity ?

Any product that can be used for commerce or an article of

commerce which is traded on an authorized commodity

exchange is known as commodity.

The article should be movable of value, something which is

bought or sold and which is produced or used as the subject

or barter or sale


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What is a Commodity Exchange ?

A commodity exchange is an association or a company or anyother body corporate organizing futures trading in commodities

for which license has been granted by regulating authority.


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The history of organized commodity derivatives in India goesback to the nineteenth century when Cotton TradeAssociation started futures trading in 1875, about a decadeafter they started in Chicago

Cotton, derivatives trading started in oilseed in Bombay(1900), raw jute and jute goods in Calcutta (1912), Wheat inHapur (1913) and Bullion in Bombay (1920).

History of Commodity Market in India


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What is Commodity Futures?

A Commodity futures is an agreement between two parties to

buy or sell a specified and standardized quantity of a

commodity at a certain time in future at a price agreed upon

at the time of entering into the contract on the commodity

futures exchange.


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ContUse of Commodity future?

Hedging

Arbitrage

speculation

Role of Commodity Exchanges

Provide Platforms

It enable actual users to hedge their price risk given the

uncertainty of the future

It provide liquidity and buoyancy to the system.


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Legal framework for regulating commodity

futures in India

Forward Markets Commission (FMC)

National Commodities & Derivatives Exchange Limited

(NCDEX)

Multi Commodity Exchange of India Limited (MCX)

National Multi Commodity Exchange of India Limited

(NMCE)


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Commodity Traded

Bullion (Gold KG, Silver, Brent)

Minerals (Electrolytic Copper Cathode, Aluminium Ingot, Nickel

Cathode, Zinc Metal Ingot, Mild steel Ingots)

Oil and Oil seeds (Cotton seed, Oil cake, Crude Palm Oil, Groundnut,Groundnut expeller Oil, Cotton, Mentha oil, RBD Pamolein, RM seed oilcake, Refined soya oil, Rape seeds, Mustard seeds, Caster seed, Yellowsoybean, Meal)

Pulses (Urad, Yellow peas, Chana, Tur, Masoor)

Grain (Wheat, Indian Pusa Basmati Rice, Indian parboiled Rice (IR-36/IR-64), Indian Rice , Barley, Yellow red maize)


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Cont

Spices (Jeera, Turmeric, Pepper)

Plantation (Cashew, Coffee Arabica, Coffee Robusta)

Fibers and other (Guar Gum, Guar seeds, Guar, Jute sacking bags, Indian

28 mm cotton, Indian 31mm cotton, Lemon, Grain Bold, Medium Staple,

Mulberry, Green Cottons, , , Potato, Raw Jute, Mulberry raw Silk, V-797

Kapas, Sugar, Chilli LCA334 )

Energy (Crude Oil, Furnace oil )


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.

The New York Mercantile Exchange (NYMEX)

London Metal Exchange

The Chicago Board of Trade

Tokyo Commodity Exchange (TOCOM)

Chicago Mercantile Exchange

International Commodity Exchanges


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Objective:

To understand Farmers awareness about commodity market.

Sub-objective:

TO identify, Whether Farmers are ready to make aware themselves for Commodity

Trading. Especially for those Commodities which they plant (Sow).

Research Methodology


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1. Identification of problems

Latent Difficulty

2. Choice of research design

Descriptive research design

3. Determining source of data

Primary source of data

4. Designing data collection forms

Personal survey

I. Research Process Cont


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QUESTIONNAIRE (Questions Used in Questionnaire)

5.Determining sampling design and sample size

Sampling Design: Random Sampling

Sampling Size: 200 Sample Taken from APMC markets (Unjha, Patan, Visnagar,

Palanpur).

6. Organizing and conducting the field survey

Interviewing.

Supervising of field work.

Close end questions:-

Dichotomous questions.

Multiple choice questions.

Rating scale.

Open end questions:-

Completely unstructuredquestions

Cont


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1. How did you come to know about Commodity Trading?

N.o Options Percentage

1 Through friends 23 %

2 Through Commissiom Agent 34 %

3 Through Brokers 38 %

4 Through Mass Media 05 %

23%

34%

38%

5%

Source from which, know about commoditymarket

Through friends

ThroughCommissiom Agent

ThroughBrokers

Through Mass Media

Data Analysis &Interpretation


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34%

54%

12%

Reason For not Trading inCommodity

Lack of awareness aboutTrading

Lack of resource

Lack of proper guidance

2. Why are you not trading in Commodity market?

N.o Options Percentage

1 Lack of awareness about Trading 34 %

2 Lack of resource 54 %

3 Lack of proper guidance 12 %

Cont


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3. In Which Commodity You are Trading?

N.o Commodity Respondent

s

Percentage

1 Jeera 54 28 %

2 Castor 30 15 %

3 Cotton 14 07 %

4 Gold & Silver 94 47 %

5 Others 06 03 %

28%

15%

7%

47%

3%

Commodity Traded

Jeera

Castor

Cotton

Gold & Silver

Others

Cont

C


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4. What is Basic Purpose behind Trading?

N.o Purpose Respondent

s

Percentage

1 Hedging 26 13 %

2 Arbitrage 08 04 %3 Spectulation 166 83 %

13% 4%

83%

Purpose For Trading

Hedging

Arbitrage

Spectulation

Cont


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Findings Only 19% farmers do trading in commodity.

Farmers prefer bullion & Agriculture commodity product for trading.

Reason For not involved in Commodity Market : lack of awareness about

trading & lack of resources. Generally, Farmers traded in commodity market for speculation.

Only 11% farmers do hedging to overcome with price fluctuation of theircrops

Recommendation: Commodity exchanges should increase the awareness about the commodity

market by educational program at the rural area and try to inform farmer

about possible hedging & arbitrage game for their crops.

FINDINGS & RECOMMENDATIONS


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Poor ratio of farmers are involve in commodity market because of lack of

resources, proper guidance, and lack of awareness about trading.

Hedging is best suitable strategy for farmer, even if few farmers follow this

strategy to prevent price fluctuation for their crop in future.

Others are just like speculator and trade in commodity just for speculation or to

earn short term profit.

Conclusion


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