Effect of Global Economic Meltdown on Commodities Markets: An Empirical Study of Select Agricultural Commodities Traded on NCDEX

22 Pages Posted: 10 Mar 2010

See all articles by D. N. Rao

D. N. Rao

Lingaya's University

Gurbandini Kaur

All India Management Association

Date Written: December 6, 2009

Abstract

The global economy is yet to recover from the worst crisis witnessed since post World War II. The world trade is projected to contract by 2.8% in 2009, which is an alarming indication. Indian economy too has been hurt to some extent by the global financial crisis. The stock markets, financial markets, export of goods and services and corporate profits have witnessed negative growth during this period.

The study attempts to empirically research the effect of economic meltdown on select agricultural commodities (Chana, Guar seed, Mustard seed and Pepper Malabar) traded on India’s largest Commodities and Derivative Exchange, NCDEX.

The effect of meltdown on volume traded (quantity and value) and prices of spot and futures contracts was empirically researched with the help of a set of descriptive statistic. Further, four Hypotheses have been formulated and tested for statistical significance using Student’s paired t-test and Welch’s unpaired t-test.

The findings of the study have been that the commodities market got more affected than stock market due to meltdown; the growth and volatility of NCDEXAGRI and FUTEXAGRI for 2008-09 have been significantly lower than that of 2007-08; trading activities (both volume and value) of the three commodities, Chana, Mustard and Pepper Malabar were significantly affected during the meltdown period; spot & futures prices of Mustard seed were affected during the meltdown period.

Keywords: commodities markets, economic meltdown, volume, trading, agricultural commodities, spot prices, futures, Indices

Suggested Citation

Rao, Dabbeeru Neelakanteswar and Kaur, Gurbandini, Effect of Global Economic Meltdown on Commodities Markets: An Empirical Study of Select Agricultural Commodities Traded on NCDEX (December 6, 2009). Available at SSRN: https://ssrn.com/abstract=1519325 or http://dx.doi.org/10.2139/ssrn.1519325

Dabbeeru Neelakanteswar Rao (Contact Author)

Lingaya's University ( email )

Jasana Road
Nachauli
Old Faridabad, Haryana 121002
India
+919971510666 (Phone)

Gurbandini Kaur

All India Management Association ( email )

14 Institutional Area, Lodhi Road
Delhi, Delhi 110003
India

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