1. An Outline of the Proposed Study
Price Risk Management Options in Wheat, Sugarcane and their Impact on Trade
An Outline of the Proposed Study
Anandajit Goswami, Associate Fellow
Centre for Global Agreements, Legislation and Trade
Resources and Global Security Division, The Energy and Resources Institute (TERI)
I.d. –
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2. Structure of the Presentation
Research Problem
Research Methodology
Research Questions
Potential Data Sources
Possible Outcomes
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3. Research Problem
What is the possible price risk of commodities like wheat , sugarcane pertaining to increased demand of these commodities for biofuel production?
What impact could the possible price risk management instruments have on the trade values of wheat, sugarcane?
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4. Research Questions
What is the possible price risk of commodities like wheat , sugarcane pertaining to increased demand of these commodities for biofuel production?
Is there any possibility of price risk arising from the growing demand for wheat, sugarcane for biofuels?
Are there any linkages between the spot prices of wheat, sugarcane with rise in biofuel production?
Are there any differences in the nature of the price risks in the two commodities?
Are there any overlapping factors contributing to price risks in these two commodities?
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5. Research Questions
Are there any differences in terms of the price risks once the spot and future price trends are considered?
Does the price behavior in futures market indicate that on the physical market?
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6. Research Questions
What impact could the possible price risk management instruments have on the trade values of wheat, sugarcane ?
How does that impact the trade value of the two commodities?
Is there a need for regulation, capacity building for the management of price risks in these commodities?
Is there a need for administrative systems for registering, monitoring and auditing trading decisions?
What role commodity exchanges could play?
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7. Research Methodology Literature Review Qualitative Analysis
Quantitative Analysis
Secondary Data Analysis
Primary Survey
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8. The Two Perspectives
The research methodology would be carried out through two perspectives –
International Scenario
Indian Scenario
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9. Research Methodology The research questions associated with -
linkage between the spot prices of the selected commodities
possibility of price risk arising from the growing demand of selected commodities for biofuels
differences in the nature of the price risks in the two commodities
overlapping factors contributing to the price risks in these two commodities
TO BE CARRIED THROUGH LITERATURE REVIEW and QUANTITATIVE ANALYSIS
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10. Research Methodology The Research Questions associated with –
Application of futures, options for a predictable revenue from trade (export, import) in these commodities
Assessment of the consumption pattern of the produced commodities
Analysis of how demand in one country for these commodities really impact the prices of the commodities in another country
Examination of how growth of national and regional markets, price risks impact commodity trade flow
Assessment of the regulatory needs
TO BE CARRIED THROUGH QUALITATIVE AND SECONDARY DATA ANALYSIS, PRIMARY SURVEY AND STAKEHOLDER DISCUSSIONS
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11. Research Methodology The research question associated with –
Impact of spot and future prices of wheat and sugarcane on the trade value of the two commodities
Linkage between the price behavior in futures market and the physical market
TO BE CARRIED THROUGH QUANTITATIVE METHODS (ECONOMETRIC TECHNIQUES, STATISTICAL TECHNIQUES)
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12. Potential Data Sources
UNCTAD Reports
Report of International Task Force on Commodity Risk Management
Report of International Food Policy Research Institute
Publications by MCX, NCDEX, MCE
Publications on Commodity Risks
FAO Reports
World Bank Reports
IISD Reports
Data through Primary Survey of Stakeholders
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13. LINKAGE BETWEEN RESEARCH PROBLEM AND OUTCOME
Analysis of the possible price risk in commodities like wheat, sugarcane owing to demand for these commodities for biofuel producton
Analysis of how price risk impacts the trade in commodities like wheat, sugarcane
Better understanding of –
implications of possible price risks of wheat, sugarcane on trade
policy strategies for implementing suitable price risk management instruments for facilitating commodity trade
regulatory and administrative needs for price risk management in facilitating trade in wheat, sugarcane through management of possible price risks
role of Commodity Exchanges in attaining the objective of practical implementation of price risk management instruments/practices for facilitation of trade in commodities
Analysis of how price risk management instruments impact the trade in the selected commodities
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14. Possible Outcomes
Understanding of implications of possible price risks of wheat, sugarcane (owing to increase demand for biofuel production) on trade
Examining what policy should be taken for unhindered trade in these commodities through price risk management
Analyzing the role of the commodity exchanges in facilitating trade flows through application of price risk management instruments
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15. THANK YOU
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