How to Manage Risk and Price?
Risk Management and Price Discovery in Agribusinesses (incl. Food and Feed Industry) By: Vijay Sardana Since ages we have conventional approached to price discover and risk management like spot price, auction, etc. In the emerging market and in new economic environment we have other financial instruments and mechanisms to discover the prices by market participants under a well-governed system of Futures Market. Futures market is expected to help the market participants through two vital economic functions, viz., Price Discovery and Price Risk Management. At the macro level, the liquid and vibrant futures market having nationwide participation also assists in sobering down inter-seasonal and intra-seasonal price fluctuations. This not only helps in bringing about reasonable stability in the prices of commodities, but also supports farmers to get remunerative prices without adversely affecting interests of consumers. Such a market also provides a marke...