Futures trading acts as a speed breaker and also helps in reduction in price volatility. However, the real price trend will ultimately prevail based on the demand and supply position. Futures trading will only tame the price volatility into a manageable position. Once the legal structure giving a regulated platform for speculation is available, illegal trading will automatically reduce in due course. Our office does not have direct regulatory power to arrest this practice of illegal trading.
Farmers are likely to benefit even without using futures market directly.
They can get the price indicator and market their produce at a correct level of prices. They can plan growing various competing commodities. In the absence of a well-functioning forward or futures market, farmers bear the brunt of price instability. With futures market, traders or processors need buildlarge inventories to cushion against unfavourable price movements. Farmers cooperatives can participate directly in the futures market either by becoming a member or through intermediaries and brokers.