So here I am again, talking about Paul W.S. Anderson’s remake of Death Race 2000, the camp but extremely fun original black comedy that up until Kill Bill was my favourite ever David Carradine performance.
And once again, I’m telling you that you should see the original and avoid this Mad Max wannabe remake.
I’m so tired of movies that look like they wanna be The Road Warrior.
Wanna torture yourself by paying to see this?
The movie opens in September. You can see the trailer HERE. As you can see from the poster Jason Statham, Tyrese Gibson, Joan Allen and Ian McShane star, with David Carradine to make a cameo.
source – shock till you drop
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Screen Gems has launched an official website for the film adaptation of the?TokyoPop?manga Priest, which carries the first glimpse of Paul Bettany in the film, opening August 13th 2010 (Sept. in the U.K.)
Set in a world ravaged by centuries of war between man and vampire, Bettany plays a warrior priest who turns against his Church to take down the blood suckers who have kidnapped his niece.?
Either the movie hasn’t finished casting yet, or IMDB is just slow as hell for this movie… but they only have Cam Gigandet down to co-star so far. Scott Stewart, director of Bettany’s upcoming Legion directs.
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The suddenly mainstream Darren Aronofsky may infact be looking to build his newly assigned task of resurrecting the Robocop franchise as a in continuity sequel, rather than a remake.
Bloody Disgusting have heard that the movie will be set twenty years after the termination of the Robocop program. The series is also being moved from Detroit to Los Angeles and that talks between Phoenix Pictures and MGM are at an advanced stage.
Again, this Aronofsky continues to fascinate me. A social commentary and artistic Robocop movie would be something to behold indeed. Or will it be a straight edged flick, can he even do a straight forward movie?
But I know one thing. Give me a twenty years later set sequel anyday over a Paul W.S. Anderson adaptation of Robocop vs. Judge Dredd or something along those lines.
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Introduction
Indian market participants have experience of trading in commodity derivatives for time immemorial. During the period of ban, there were reports of parallel markets in commodity derivatives. In 2002, the ban was lifted and the Government approved the launch of national-level trading platforms. Since 2002 there has been a revival of commodity derivatives markets in India, both in terms of commodities allowed for futures trading and volumes of the trade.
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MCX Comdex fell by 24% during 2008 — somewhat lower compared with the decline in international commodity futures indices of Dow Jones AIG Commodity Index Cash Index (DJAIG) at 36.6% and Reuters/Jefferies Commodity Research Bureau (RJCRB) at 36%. For a comparative analysis of MCX Comdex with the other global indices, is recalibrated and the base period of all the indices is 100 from June 2005. Levels are calculated as in January 2009.
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Table 1: Comparison of MCX Comdex with major global commodities indices
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Indices
Levels in 2005
Levels in January 2009
RJCRB
100
128.7134
DJAIG
100
102.7972
Comdex
100
128.5218
??????????????????????? Source: Industry Analysis
Note: ???? RJCRB -? Reuters/Jefferies Commodity Research Bureau
DJAIG? – Dow Jones AIG Commodity Index Cash Index
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The base period of all the indices is 100 from June 2005. Levels are calculated as in January 2009; MCX Comdex fell by 24% during 2008 — somewhat lower compared with the decline in international commodity futures indices of Dow Jones AIG Commodity Index Cash Index (DJAIG) at 36.6% and Reuters/Jefferies Commodity Research Bureau (RJCRB) at 36%.
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A comparison of the share of equity market investors’ wealth in GDP with that of the commodity futures markets shows that India ranks quite high among all countries. The ratio of India’s market capitalisation to GDP touched a historical high of 165% in early 2008. While this is a substantially sharp rise, India is still in the fifth position, behind Hong Kong, Singapore, Switzerland and Taiwan, some of which have ratios in excess of 200%. The value of investors’ wealth in Rupee-denominated spot market turnover terms is approximately Rs.30,860.75 billion in 2008-09 (excluding assets under management of fund management houses).
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The derivatives segment of the Indian equity markets ranks seventh (S&P CNX Nifty Futures) and tenth (S&P CNX Nifty Options), respectively, in terms of turnover ratio when compared to the top 20 derivatives exchanges globally. The Indian commodity derivatives exchanges, on the other hand, are among the top 10 in terms of volumes generated.
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Table 2: Turnover of the Indian Commodity Derivative Exchanges
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Year
Turnover (in Rs. Billion)
2002-03Year in
665.30
2003-04
1,293.64
2004-05
5,717.59
2005-06
21,551.22
2006-07
36,769.27
2007 -08
40,659.89
2008-09 (Nov. 2008)
33,162.07
Source: MCX, NCDEX, NMCE & NBOT
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In 2001-02 futures trading was allowed only in eight commodities, the count jumped to 109 in 2008-09. The value of trading in Rupee-denominated terms saw a quantum jump from about Rs.350 billion in 2001-02 to Rs.33,162.07 billion in 2008-09.
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Inflation and Commodity Futures Market
With growing financialisation of commodities, the role of speculative activities in commodity exchanges as a determinant of inflation has often been highlighted as an issue of policy relevance, particularly during episodes of high inflation driven by supply shocks involving commodities such as oil and metals as well as agricultural output. The financialisation channel is perceived to have magnified the impact of disequilibrium between demand and supply in specific commodities on prices, weakening thereby the role of fundamentals in the price formation process. More importantly, speculation that affects futures prices has been argued to affect spot prices through the channel of arbitrage. The sharp volatility in international commodity prices since 2008 has increased the analytical focus on studying the interactions between prices in spot and futures markets for commodities. According to the UNCTAD (2010) “…extraordinary increases in the volume of commodity derivatives as asset classes attracted swings of short-term portfolio investments, causing prices to deviate further from their trend levels. This increasing interest in commodities as an asset class has been termed the financialisation of commodity markets, which is a relatively new factor in price formation in commodity futures markets”.
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Increases in food and essential commodity prices in India in 2009-10 brought to the fore the debate on the role of commodity futures market in influencing price trends. The share of agricultural commodities in overall futures trading has declined in recent years reflecting imposition of bans on trading of several commodities. Against the backdrop of growing perception that manipulative activity was causing distortions in the futures market and stoking inflation, the Government of India had constituted an Expert Committee on Futures Trading (ECFT) in 2007 with Prof.Abhijit Sen as the Chairman to study the effects of futures trading on prices of agricultural commodities in the country.
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The Committee viewed that no strong conclusion can be drawn on whether introduction of futures trade is associated with decrease or increase in spot price volatility. The standard approach to study the impact of futures trading in commodities on their spot prices is through Granger causality tests. The empirical analysis for India is often constrained by the breaks in data on account of imposition of frequent bans and subsequent permission for relisting of certain essential commodities in the commodities exchange.
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Table 3: Granger Causality Tests of the Relationship between Spot and Futures Prices of Agricultural Commodities
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Commodity
Hypothesis on the Direction of Causality
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Futures Prices do not cause Spot Prices
Spot Prices do not cause Futures Prices
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Significant*
P Value
Significant*
P Value
Sugar
Yes
0.00
Yes
0.00
Urad
Yes
0.00
Yes
0.00
Tur
No
0.21
No
0.42
Wheat
No
0.42
Yes
0.04
Chana
No
0.74
Yes
0.07
Potatoes
No
0.14
No
0.81
Source: RBI Annual Report 2009-2010, P.32
* If significant, the null hypothesis is rejected.
Note: The tests relate to monthly data for the period 2004 to 2009.
For commodities on which ban was imposed, data for the period 2004-2007 were used.
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The empirical analysis does not provide any conclusive evidence in support of the relationship between spot and future prices. Commodity prices in India seem to be influenced more by other drivers of price changes, particularly demand supply gap in specific commodities, the degree of dependence on imports and international price movements in these commodities.
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International Trends
As a result of globalization and liberalization, more and more farmers and traders are becoming exposed to the vagaries of world commodity prices, and to heightened international competition. As s result, the importance of commodity exchanges and other tools for the transfer of risk (essential elements of an efficient market place) is increasing. Meanwhile, developments in, primarily, technology and communications are driving a drastic upheaval of the commodity exchange sector. Key factors affecting exchanges include:
The trend towards electronic trading; even the exchanges that have a legacy of open outcry (and the concomitant problem of floor brokers keen on defending their turf) are now moving towards electronic trading.The emergence of Internet-based commodity exchanges and Electronic Communication Networks (ECNs) using a combination of dedicated networks and the Internet, as competitors to exchanges.Globalization of financial markets, where players now use multiple products on multiple exchanges.Few new products available for futures exchanges to launch.
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Farming Community and Commodity Exchanges
In understanding the efficacy of futures instrument in hedging the price risk of farmer’s aggregator model is evolved to enable farmers in leveraging commodity exchanges. The following are some of the factors to be addressed to establish a concrete bond between farmers and commodity exchanges:
1.????? Price Discovery: The awareness among farmers about price discovery mechanism through futures market. The regular access to information on supply and demand of domestic and international markets to understand the price pattern is essential.2.????? Efficient Storage: Farmers can take decisions on storage options of their produce. Member farmers can advantage of positive market outlook and upward price trend, and retained their produce till the end to realize better prices.3.????? Better Negotiation Power: Regular dissemination of price information leads to negotiating power in the spot markets/local traders. These prices are to be displayed on the regular basis in the villages. The trader knows that farmers have access to futures market prices and have active positions on MCX platform.4.????? Assimilation of information: In implementing the initiative of the aggregator model the institutional design, costs and benefits sharing, training & capacity building and other incidental aspects are assimilated.5.????? Discussions: The farmers opinion on their participation in commodity exchanges are collected and group discussion are carried out for future market benefit.
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The following further initiatives will certainly give fillip for enhancing farmers’ participation in commodity exchanges and thereby rendering benefit directly to them
1.????? Market Information Access: The farmers track the market based on the information disseminated and have an outlook on prices. Price discovery process provides them an idea about price movements. The price movement signal assists them in planning their spot operations effectively.2.????? Positions on Exchange: Farmers understands the mechanism for locking-in their desired prices. The price signals from futures market enables them to decide on storing their produce for the longer period in the expectation of better realization from spot market.3.????? Spot Market Operations: Physical market operations and storing their produce for longer period in the expectation of better price realization makes the farmers to manage the risk and plan their process based on price signals.
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The problems and constraints for trading with their commodities in derivatives market are enlisted below:
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I Regulatory Constraints
The foremost is with respect to participation of small and marginal farmers on commodity exchange are the procedural hurdles (PAN card requirement, KYC norms compliance, burdensome paperwork etc) for opening a demat/trading/bank account.Restriction on participation of financial institutions (Banks, Mutual Funds, FIIs) also undermines the liquidity on commodity exchanges.The bans/suspensions on futures trading in commodities of strategic importance have shaken the confidence of farmers and physical market players in the price risk management effectiveness of commodity derivatives.?Lack of useful risk management instrument like options which have proved to be of immense value in managing risks of farmers in other countries restrains potential hedgers in India by making them vulnerable to the unlimited downside risk inherent in futures trading.
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II Policy Constraints
Policy interventions by the Government have a momentous impact on the direction and magnitude of price movements in commodities. Abrupt policy changes by the Government generally result in upsetting the market equilibrium leading to the shift of balance in favor of one or the other counterparty. Uncertainty of Government interventions acts as a dissuading influence on genuine market participants (including hedgers) and weakens the free-market behavior of commodity markets.
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III Institutional Constraints
The procedural requirements and the technical complexities involved in commodity derivatives trading necessitate the presence of institutional entities which can act as technical support providers for farmer participation on commodity exchanges. Grassroots organisations like NGOs, cooperatives, agribusiness companies, farmer organisations have the ability to serve as technical support providers but given their existing under-preparedness and limited capacities for managing price risk management initiatives, the fruits of promising initiatives for improving commodity markets in India may not reach the intended beneficiaries especially the disadvantaged farmers.Hedging the prices of the forthcoming harvest through futures trading requires the farmer to pay in the initial margin and Mark-to-Market (MTM) margin upfront. Such requirement is extremely constraining for farmers to hedge their price risks and calls for funding through institutional financing mechanisms.
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IV Variety Difference:
The major constraint to farmers is incongruence in existing contract and physical market operations (like in BT Cotton).
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The following initiatives will enrich the knowledge of farmers to trade in commodity derivative exchanges eliminating the inherent weakness in the system and strengthening their participation and providing wholesome benefits?
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1.????? Training ?& Capacity Building
Simulation and coaching exercises should be conducted to train them and to undertake the project in association with industry experts/specialists.
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2.????? ?Spot Market Linkages
Monitoring the quantity and quality of the produce periodically will standardize production and market operations. The aggregation process requires conducting of post harvest review and to undertake dispatch and delivery of the farm produce.
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3.????? ?Financial Support
Financial support necessitates development of a detailed project plan for streamlining the various activities. The sources include farmers’ contribution, loan from financial institution and development funding for envisaged development activities under the initiative.
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4.????? Supportive Linkages
To ensure standardization of produce, tie-ups with suitable agri-input providers (seed, fertilizer, crop insurance and pesticide companies) for bulk procurement and for quality and quantity assured technical support should be undertaken.
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Conclusion
India needs a more efficient, more comprehensive commodity futures industry. This futures industry should be organized in line with best international practice. That is to say, the system must rely to the extent possible on self-regulation (with powers vested in the exchanges and in the brokerage community, and the government’s regulatory role limited to setting the general framework and ensuring that exchange- and broker-level self-regulation works properly); enable very low transaction costs; be financially secure; and be dynamic. Agriculture co-operatives should be encouraged to invest in commodity exchanges and clearing houses in order to offer clearing and settlement services to farmers and processors across the country.
