Futures markets dominate spice and rubber prices, impacting producers and traders.
The study looked at how prices and volatility of spices and rubber in India are connected between spot and futures markets. They used data from 2004 to 2019 and found that futures markets play a big role in setting prices and affecting volatility in spot markets. However, they also discovered that there are different responses between cash and futures prices. Spices futures are better for hedging than rubber futures. This information is important for producers and traders who want to use futures contracts to make money from price differences between futures and cash markets.