ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Futures Markets in Other Countries

February 21, 1970 (vi) act as a barometer of prices to producers, consumers and all other economic interests and reduce regional prices disparities and (vii) impart continuity to price and liquidity to operations of buyers and sellers. (4) This Conference further draws the attention of the Government that the recent studies of the eminent economists, research institutions and several Government Committees provide formidable and unmistakable evidence about the great usefulness of the institution of forward trading in the orderly marketing and pricing of commodities and in discharging various other functions useful to the economy. It is worthwhite to note that forward markets also function in many developed as well as developing foreign countries, in agricultural and non-agricultural commodities and new ones are springing up there in recognition of their manifold utility. (5) The1 Conference strongly feels that uninformed criticism voiced in some quarters that futures markets create excessive rise and fall in price needs to be answered and refuted. The steep rise or slump in prices is influenced and determined by various economic factors and forces viz demand and supply, variations in crops due to vagaries of monsoon, import and export policies, zonal restrictions, monetary and fiscal policies, etc over which the futures markets have no control. As a matter of fact futures markets tend to curb excessive rise or fall in prices which are accentuated in the absence of futures markets as conclusively proved by recent research studies based on empirical evidence. (ft) The Conference further draws tile attention that futures markets are statutorily regulated under the Forward Contracts (Regulation) Act and work under well conceived comprehensive rules and regulations approved by the Government which also provide healthy safeguards.

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