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In futures trading the contracting parties negotiate on, not only the price at which the commodity is to be delivered on a future date but also on what quality and quantity to be delivered and at what place.
Futures trading perform two important functions: price discovery and hedging of price risk in a commodity. Presently, futures trading is permitted in 41 commodities in India. These include pepper (domestic and international), turmeric, gur, castorseed, hessian, jute, sacking, cotton, potato, castoroil (international), soyabean (oil and cake), kapas, RBD palmolein, sugar and tea.
