Assessing the impact of commodity derivatives suspensions

Abstract

Food price inflation is a global concern. Countries across the world intervene in their food markets to ensure price stability since high prices have implications on food security, overall inflation, and can cause social unrest (Bellemare, 2015). Similar measures have been used by the Indian government. A unique intervention in this context relates to commodity derivatives suspension. We examine the impact of commodity derivatives suspensions on food prices in the context of two commodities. We do not find any evidence that commodity derivatives trading resulted in food price inflation for the two commodities examined in the study.

Keywords: Commodity derivatives, food policy

JEL Classification: Q18