The existence of commodity markets can be considered as old as Indian history itself. It is the market wherein forwards, futures and options contracts are traded on all the commodities. Commodity futures allows both the producers and consumers of agricultural products in managing the price risk that might arise due to various factors. But this market has not been utilized to its fullest extent. There still exist certain drawbacks and intricacies that need to be addressed by the government. What are the Issues? Read on.

While referring to the Indian commodity markets, we need to take note of the global trends in organizing commodity exchanges, and the manner in which structural changes have been brought about internationally. India being an agricultural country, trading in commodities is not new. References to the existence of commodity markets in India are said to date back to Kautilya Arthasastra itself. Even in the good old days when no technology or formal systems existed, the Indian farmers traded in various commodities for their survival. In those days when weather conditions were unpredictable, the producers of commodities were prone to uncertainty regarding their produce as well as prices. They are known to have entered into informal forward contracts in order to avert this uncertainty. Of course, the farmers then could not have imagined that the same informal markets would turn into a massive business in the future

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