Price Volatility and Risk Management in Commodities Trading in India

Abstract

This paper investigates price fluctuations on commodity exchanges in India. The investigation reviewed risk mitigation measures taken by the market participants using secondary data. Global demand, geopolitical developments, and supply chain issues resulted in market volatility. The scope for hedging was limited, thereby increasing the financial exposure of the traders. The effectiveness of government interventions intended to stabilize volatility in commodity markets was not uniform. The adoption of technology diversification resulted in improved transparency and risk mitigation within the market. This study particularly calls for enhanced financial education and policy changes. The major findings were the use of digital devices and sophisticated trading systems as the primary remedy.