Commodity Derivatives: Hedging by Futures Contract

This book offers a comprehensive understanding of commodity derivatives, particularly focusing on commodity futures contracts, and their role in price risk management. Written in a simple and accessible style, it covers the fundamentals of commodity derivatives, their application in managing price uncertainties, and the importance of hedging strategies. The book also delves into the specific case of cardamom futures, exploring production, trade, marketing, and price risk management using futures contracts. With practical insights and examples, this book is a valuable resource for anyone looking to understand commodity derivatives and their impact on the agricultural market.

This book provides a detailed exploration of commodity derivatives, emphasizing their significance in price risk management. It covers the basics of commodity futures contracts, their features, and their role in price discovery and hedging strategies. The book examines the specific case of cardamom, a high-value agricultural commodity, highlighting its production, trade, and marketing, alongside the use of futures contracts for price risk management. It also discusses the awareness of commodity futures among market participants and proposes a model for small farmers through the FPO structure to manage price risks effectively.

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