Indian commodity markets show spot prices drive futures, impacting global economy.
The study looked at how prices are set and how volatility spreads in Indian commodity markets. They used different statistical models to analyze data from the Multi Commodity Exchange of India. The results showed that the spot markets for agriculture, energy, and metal commodities are important in determining prices. Information flows from spot markets to futures markets. Also, volatility tends to move from spot markets to futures markets in all commodity sectors.