MBA

In this section the summary of major findings of the qualitative and quantitative dimensions of the study are stated.
5.1. Personal profile of the traders.
This section covers the summary of findings of personal profile of the traders
5.1.1. Age of sample traders.
It was observed that majority (73 per cent) of the traders were in the 40-60 age group. Around 13 per cent of the sample belonged to 30-40 age group. Traders in the age group below 30 years and above 60 years contributed 7 per cent each of the sample.
5.1.2. Educational qualification of traders
Majority (80 per cent) of the sample were either graduates (around 53 per cent) or post graduates (around 27). The remaining 20 per cent had secondary education.
5.1.3. Experience in cardamom trading
It was observed that the selected traders have long years of experience in cardamom trading. Majority (60 per cent) of the traders had 10 or more years of experience in cardamom trading. 27 per cent had 5-10 years of experience. The remaining 13 per cent had 1-5 years of experience.
5.1.4. Other business
It was observed that majority (53 per cent) of the traders were trading other spices and 27 per cent had no other business. The remaining 20 per cent traders who had other business like trading in shares etc.
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5.1.5. Legal status of the traders
Majority (73 per cent) of the traders were sole proprietorship and 17 per cent traders were private limited company. The remaining 10 per cent of them were partnership firms.
5.1.6. Location of the traders
It was observed that 30 per cent of traders were from Bodinaikannur. 17 per cent each of the traders were from Vandenmedu and Kumily. 10 percent each of the traders were from Nedumkandam, Puttady and Kattappana. The remaining 6 per cent were from Puliyanamala and Ernakulam
5.2 Behavior of the traders in spot market
This section discloses the summary of findings of traders in the spot market
5.2.1. Satisfaction on the quality of cardamom received
It was observed that 70 per cent of the traders were satisfied with the quality of cardamom they were getting. The remaining 30 per cent are not satisfied with the quality.
5.2.2. Grades cardamom before selling.
It was observed that all the traders undertake grading of cardamom before they sell.
5.2.3. Benefits of grading cardamom before selling.
Majority (63 per cent) of the traders believe that grading of cardamom before selling helps to fetch better price for higher grades. The remaining 37 per cent have the opinion that it helps in delivering orders according to required specifications.
5.2.4. Major markets catered by traders.
Majority (70 per cent) of the traders are selling cardamom outside Kerala and only 23 per cent are selling in the Kerala market. The remaining7 per cent trader‟s markets cardamom in foreign countries.
5.2.5. Price difference between spot price and future price
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It was observed that 60 per cent of the sample had the opinion that there was the difference of 50-200 Rs between future price and spot price. Another 20 per cent opined that the difference was below 50 Rs. Traders who reported price difference above Rs. 200 formed to 10 per cent of the sample. The remaining 10 per cent of the sample indicated there was no difference between the spot price and future price.
5.2.6. Need for additional infrastructure development
It was observed that adequate marketing infrastructure in the cardamom producing areas. No additional infrastructural development is required for now.
5.2.7. Loan from financial institutions against cardamom stocks.
It was observed that 57 per cent had not availed any loans against the stocked cardamom. Only 43 per cent have availed loans and among 80 per cent of them avail loans from various NBFCs and rest from commercial banks. The interest rate in commercial banks varied from 10.5 -12 per cent and 14.5 -17 per cent in NBFCs. The tenure of the loans is less than I year.
5.2.8. P rice risk mitigation strategies adopted by the traders.
The major strategy to offset risk was hedging in futures. There are some other methods which are undertaken by traders. It was observed that 40 per cent of the traders bid at auction against the demand received. Another 27 per cent each either sold the cardamom immediately or took no specific methods. The remaining 6 per cent will hold the commodity until better price was realized.
5.3. Behavior of traders involved in cardamom future trading.
This section discloses the specific findings on the behavior of traders involved in cardamom futures trading.
5.3.1. Awareness of traders about cardamom futures
It was observed that all the selected traders were aware about the future trading in cardamom. Everyone had heard about cardamom futures. But not all had deeper knowledge about future trading. They were not using future price as a benchmark price to bargain with exporters or retailers.
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5.3.2. Participation in futures trading.
It was observed that about 53 per cent of the traders were involved in cardamom futures trading. The remaining 47 per cent of the traders were not involved in cardamom futures
5.3.3. The frequency of trading by traders in cardamom futures.
It can be inferred that 44 per cent of the trader`s trade daily in futures. Around 37 per cent traders trade more than twice a month. 13 per cent of the traders trade once in a month and 6 per cent trade rarely.
5.3.4. Improvement in grading facilities since the advent of Cardamom futures
Majority 80 per cent of the traders believe that there was improvement in grading facility since the advent of the cardamom futures. Only 20 per cent have the belief that it had created no improvement in grading facilities.
5.3.5. The benefits of cardamom future to the farmers
In the survey it was observed that majority (70 per cent) of the traders opined that cardamom future was beneficial the farmers had the opinion that cardamom future is beneficial to farmers. Majority (62 per cent) of the traders expressed the opinion that cardamom futures help the farmers to lock in the price. Another 29 per cent believed that it ensured better income to the farmers. The remaining 9 per cent opined that it gave price signals.
5.3.6. Benefit of cardamom futures to traders.
Majority 83 per cent of the traders have the opinion that cardamom futures are not beneficial to traders. The remaining 17 per cent traders believes that its beneficial to them.
5.3.7. Problems faced by cardamom traders in future trading.
It was observed that 38 per cent of the traders raised lack of different grades available for trading as a problem. 31 per cent of the sample indicated high quality parameters was a problem. Another 19 per cent pointed out that biased spot price fixation as a problem.
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The remaining 12 per cent indicated lower tolerance rate of defected and lowers size seeds was a problems.
5.3. 8. Awareness of financial schemes which lend against cardamom stocks about future trading.
Majority (85 per cent) of the traders opined that financial institutions which lent against cardamom stock were aware of future trading. However, 15 per cent believed that they were not aware of.
5.3.9. Awareness about financial mechanisms which lend against trading in futures
It was observed that 73 per cent of the traders were unaware about financial schemes of financial institutions which provide credit against future trading. The remaining 27 per cent were aware about it.
5.3.10. Loan against trade in futures
The survey infers that 63 per cent of traders availed loan against trade in futures. The remaining 37 per cent were not aware about such lending schemes.
5.3.11. Benefits of Cardamom Futures to the Ecosystem
It was inferred from the survey that around 30 per cent of the traders indicated grading the cardamom before selling was the major change with the advent of future trading. Another 24 per cent pointed out it introduced an opportunity to hedge against price risk. 20 per cent indicated it brought in quality consciousness in the value chain. Around 16 per cent hinted about increase efficiency in price discovery. The remaining 10 per cent had the opinion that it gave signals about the price trend.
5.3.12. Suggestions to make cardamom future more attractive.
It was observed that 33 per cent of the traders had the opinion that MCX should gain the trust of traders. There were several criticisms like spot price fixed arbitrarily, north Indian lobby is controlling the future price etc. 27 per cent wanted MCX to include a separate contract for 6 mm bold category. 17 per cent wanted the relaxation in the high quality parameters of MCX. 10 per cent traders indicated the need for increasing the tolerance rate defected or lesser size seeds. 6 per cent each wanted reduction in contract period from 3 months to a lower time period and inclusion of contract for weather hedging.
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5.4. Price volatility of cardamom.
This section discloses the summary of findings related to price volatility of cardamom.
5.4.1 Performance of MCX cardamom from 2010-17
In the year 2012 the number of traded contracts in lots (2731827), quantity traded (273182.7), total value (2866931.3) was comparatively high, follwed 2013 were the the number of traded contracts in lots were 1708176, quantity traded was 170817.6, total value was 2866931.3.
During the year 2010 the unit price was Rs. 1417.87, which was the highest value, followed by 2017 with Rs. 1301.36.
5.4.2. Comparison between the price of cardamom sold through auction centre and the spot price of MCX during the Financial Year 2016-17
The average price of MCX spot market (Rs.1125.72) was higher than the average price at auction center (Rs. 990.96). The average price difference between them was Rs. 134.75. It may also be observed that the futures price was higher than the e-Auction price in all the months. The annual standard deviation was calculated to measure the price volatility. e - Auction price had the higher annual standard deviation (16.23 per cent) when compared to annual standard deviation of MCX spot price (14.45 per cent) for the financial year 2016-17. Higher annual standard deviation means price volatility is higher. Therefore, e-auction price is more volatile than MCX spot price. As the price volatility of e-auction center is higher than MCX, it is more efficient in price discovery than futures market.
5.4.3. Price volatility of MCX spot price for the past 10 financial years (2007-2016)
During the year 2016-17 witnessed the high price volatility with an annual standard deviation of 16.45 followed by the year 2010-11 with an annual standard deviation of 14.32 and 2009-11 with an annual standard deviation of 11.12. During the 2013-14 and 2008-09 the standard deviation was the least 2.65 and 2.83 respectively.