Role of Commodity Futures in Stabilising Price Fluctuations and Enhancing the Marketability of Cardamom in India

Abstract

Commodity futures significantly mitigate the risks associated with price fluctuations in the Indian cardamom market. By allowing farmers and traders to hedge against unpredictable price swings, futures contracts on platforms like MCX and NCDEX provide stability and financial security (Bhatia & Kapoor, 2017). Studies indicate that futures trading enhances market transparency, reduces speculative volatility, and promotes better price discovery mechanisms (Shukla & Mishra, 2021). Additionally, policymakers emphasise the need for improved infrastructure and awareness programmes to encourage smallholder farmers to participate in the commodity futures market (Sinha et al., 2019). Strengthening regulatory frameworks and integrating digital platforms for seamless trading can further enhance the efficiency and accessibility of commodity futures in the Indian cardamom sector (Mehta & Reddy, 2017). Cardamom, known as the 'queen of spices', has been essential to Kerala's agrarian economy for centuries. Despite its high status in the international spice market, cultivation faces a number of challenges, including climatic variations, biological factors, socioeconomic influences, and institutional governance. The purpose of this study is to identify the key factors influencing changes in cardamom cultivation quality in Kerala, with eight primary factors accounting for 80.56% of the variance. Furthermore, the role of commodity futures in stabilising price fluctuations and increasing the marketability of cardamom in India is investigated. Effective policy interventions and support mechanisms are necessary to sustain the productivity and competitiveness of this high-value spice in both domestic and global markets.