Prof. H. P. SinghDeepika Joshi2016-10-012016-10-012016http://krishikosh.egranth.ac.in/handle/1/79694Five major spices viz. chilli, black pepper, turmeric, cumin and coriander were considered for the present study. The data pertaining to objectives of the study were collected from the different secondary sources. These data pertains to different periods depending upon the demand of objectives of the study and their availability. Five major spices viz. chilli, black pepper, turmeric, cumin and coriander were selected for the present study. To analyse growth rate, compound growth rate analysis was used using the exponential growth function for examining the trends in area, production, productivity, export and import of major spices. To work out instability in spices, Cuddy Della Valle instability index was used. Markov chain approach was used to study the changing pattern of spices exports by obtaining the transitional probability matrices. For estimating long-run trend of prices, the method of least square estimate was employed. ARIMA technique was employed for price forecasting. The multiple regression analysis was carried out to find out which factors have greater influence on deciding price movement. Co-integration technique was used to examine the long run relationship between spot and futures prices. Vector Error Correction model was used to examine the price adjustment behavior between spot and futures market. Impulse response function was used to check the effect of shock in both the markets in future. The study advocates the need to broaden the coverage by effectively popularizing the futures trading among traders, farmers and various stake holders in the commodity trading platform and convince the policy makers about the effectiveness and rationality of futures trading in India. The study revealed better hedge efficiency for producers to hedge their price risk in the futures platform of the exchange. The evidence of a stable long-run relationship between spot and futures market for all spice commodities was found and it was noticed that equilibrium was obtain immediately whenever any deviations between the markets exist. This result infers that spot market driving the futures market by systematically incorporating the market information and also infers that both the markets have gained sufficient trading experience through long-run equilibrium relationship. If the same result is the common phenomena for the other commodities in these markets then it would imply that both the markets potentially can form prices and design the unique institutional structure. Commodity futures trading requires the presence of well-developed support infrastructure in the country in form of modern weighing, grading, standardization and storage facilities, electronically linked modern warehouses, which can help in increasing the linkages between the physical and futures market, effective price discovery and increased movement of large number of commodity players including farmers and proper, timely and effective information dissemination of prices.enPrice trends, major spices, spot markets, forecast prices, growth and directionThesis