STRATEGIC MEASURES TO MEET MARKETING CHALLENGES IN THE CHANGING SCENARIO OF LIBERALISATION

摘要

Competitiveness holds the key for survival of economies in the liberalising and globalising world. The production and marketing constitutes two principal cost components of commodities, and hence the efficiency in both these Junctions determines theircompetitiveness. Two key factors by which goods or services from the secondary or the tertiary sectors differ from the primary commodities sector are in their ability to allocate resources effectively in response to market signals and their ability to squeese efficiency out of the value chain offering the best value to both the producers and the consumers. Theoretically, trading in commodity'futures helps the market discover prices based on fundamentals (i.e. based on the strength of the supply and demand forces) while allowing the physical market participants to hedge (or lock in) their returns. Commodity Futures market has a very vital role to play in any economy as the futures contracts perform two important junctions of price discovery and price risk management. It also facilitates integrated price structure throughout the country and ensures price stability. As the futures markets percolate into the physical markets, it also led to several beneficial effects indirectly by means of boosting the infrastructure, increasing the credit flow, providing efficient alternative marketing opportunities, etc. The present study has been undertaken to investigate to achieve market efficiency through price discovery mechanism and study the transfer of price risk through hedging. The study based on future and spot price series of gram which followed a normal andrelatively peaked distribution, concludes that the objective of market efficiency was achieved in commodity futures as the prices were discovered in future and spot markets. This implied that the benefit of better price has percolated to the farmers as well. The spot markets are observed to be the satellite of the future markets at present. The possible reason may be less participation in future trading both in number as well as volume of trade. The study also concludes that there exist a good opportunity for farmers to transfer their price risk as the 80 per cent (complete hedging) of prices were hedged against risk (In most of the contracts).