-- ISBN: 9788175110502 by Dr. Hanish Kumar Sinha (Price:
Rs. 650.00)
Understanding
Indian Commodity Market: An Overview of Operation, Regulation and Approach to
Price Trend Analysis
is a unique imitative which brings forth the complexities of functioning of
Indian Commodity Market in a simple easy to grasp text. The chapters give a
deep insight into the different realms of commodities market from the investor
as well as the regulator point of view. The author has taken utmost care to
list out the minutest details which would enhance the understanding of the
individual about the Indian Commodity Market. This book aims at making the
individual/ corporate a better investor.
The trading of commodities consists of direct physical
trading and derivatives trading. This was largely a result of the growing
attraction of commodities as an asset class and a proliferation of investment
options which has made it easier to access this market. The first chapter enlists the various
Commodity Exchanges dealing in derivative market in India & World. It
highlights the similarities and the difference between the financial derivative
and the commodity derivative. The introductory chapter gives special mention to
the different domestic and global commodity exchanges functioning actively.
Apart from the adequate attention has also been made to highlight the
importance of warehousing in commodity derivative market. The second chapter deals with the major
commodity exchanges active in the Indian commodity space. It highlights the
operation of various commodities exchanges along with the detailed list of
commodities traded in them. The trading of commodities consists of direct
physical trading and derivatives trading. This was largely a result of the
growing attraction of commodities as an asset class and a proliferation of
investment options which has made it easier to access this market. The third chapter deals with the various
facets of quality testing and maintenance of Commodity in Indian market. It
highlights the role of various agencies involved in the quality aspect of the
commodities as most of the items are perishable in nature. This chapter gives
special mention to the different domestic and global commodity quality
standards applied actively in the commodity market space. Apart from the
adequate attention has also been made to highlight the importance and functions
of various agencies involved in assuring the quality of in commodity market.
The fourth chapter
deals with the regulatory aspects of the commodity trading practiced in India.
The apex authority controlling the commodity trade is the Forward Markets
Commission which was constituted by the FCRA. With the passing of years several
amendments were proposed to ensure smooth and efficient regulation of the
commodity exchanges and trading practices. The chapter highlights the different
basic rules and guidelines in accordance to which the trading is done. The use
of commodity-linked financial risk management instruments by commodity
producers, traders and consumers, including processors, reflects the desire to
obtain protection from uncertain adverse price movements and, in certain cases,
to procure short-term finance. The higher and the more unpredictable the price
volatility of a commodity, the greater is the possibility of incurring losses
or realizing gains on future sales or purchases of a commodity. The greater the
share in an enterprise's earnings or in its production costs that a specific
internationally traded commodity or commodities represent, the greater that enterprise's
exposure to price risks. Instruments for managing commodity price risks are
varied; they include stabilization programmes and funds (at the national or
company level), marketing strategies involving the timing of sales and
purchases, long-term contracts with fixed prices, forward contracts, the use of
futures or options to hedge prices through commodity exchanges, and over-the
counter (OTC) markets and the use of swaps and commodity-linked bonds. It is
observed that credit and market risk commanded the lion’s share of risk
managers’ time while operational risk was still being largely overlooked. It
might also be notice that risk managers spent most of their time monitoring
risk, less time measuring it, and an even smaller amount of time actively
managing it.
In the fifth
chapter an attempt has been made to study the various types of risk
involved in the commodity trading and design suitable mitigation methods using
various trading instruments available at the disposal of the investor. The
various factors affecting the price of the commodity is dealt in detail in
sixth chapter. Prices of commodities are very influential to demand and supply
of commodities with one’s own country and competing countries. The duration
& time difference of cropping seasons, carry over stock, quantum of export
and imports, internal consumption pattern, surplus for exports, prices of the
substitute commodities play their role in price determination. Government
interventions in export- import policies, allowing duty free imports, export
subsidies, export bans, market interventions like Minimum Support Price (MSP) also
has very critical role to play in terms of pricing of agricultural and certain
industrial commodities. Commodity market participants want to take advantage of
such price fluctuations depends upon their risk taking ability and anticipation
of the price movements. Commodity market participants are classified under the
following three broad categories - hedgers, speculators, and arbitragers
Commodity market participants provide the liquidity and volume to the market
which helps to derive representative price. Commodity derivative markets differ
from financial markets in terms of physical Settlement, Warehousing and quality
of underlying assets because of the very difference of the nature of asset.
Commodities are bulky in nature, requires safe storage space, it deteriorate
with time and needs to settle by actual physical delivery.
The seventh
chapter deals with the different tools required for the technical analysis.
The major tools to be mentioned are charts and indicators. Important
combination of chart patterns has been explained in detail in this section. One
must be vigilant enough to spot the patterns in the dynamic market to be able
to forecast the prices with increased accuracy. The major indicators (leading
and lagging) are expected in the later stages of the section which normally
guides the analyst to identify the prices trend in the market. The chapter
highlights the different charting patterns which are identified in the dynamic price
chart by analyst to forecast the price of a particular commodity or script or
index.
Apart from the above chapters, the book also has the
section of Glossary of Important Term and references which could be of great
help to the readers.
The Book can be bought online directly from the link
given below:
https://notionpress.com/read/understanding-indian-commodity-market
