個案資料

The state of Uttar Pradesh was India’s leading producer state of mentha. The state’s small and medium-sized enterprises and trade entities were involved in the processing, distillation, crystal manufacture, and export of mentha. After 2017, there had been a deep decline in mentha oil futures trading, which wiped out liquidity and led to several market participants withdrawing from the Multi Commodity Exchange of India Limited (MCX). The MCX had long been a market leader in commodities, supporting futures trading in precious metals and bullion, energy, and a few agricultural commodities—notably, mentha oil. The senior vice-president and head of business development and marketing at the MCX was exploring ways to promote liquidity and raise the volume and turnover of mentha oil futures trading. Having contributed to a brainstorming session with the product development team based on the findings of a 2020–21 stakeholder study of the mentha market, he now had to integrate his domain knowledge and trading expertise with the insights gleaned from the stakeholder’s report to devise a strategy for resurrecting the slumping mentha oil futures.

The case may be used for a graduate-level course in a management or business administration program focusing on corporate finance, financial management, financial derivatives, and risk management. Additionally, the case may be discussed in an elective course on commodity derivatives markets as part of a master’s degree program in food and agribusiness management or an executive training program on managing (speculative) risks in commodity businesses, with an emphasis on components contributing to a futures contract’s success (or failure) in price discovery and price risk management. After working through the case and assignment questions, students will be able to do the following:<ul><li>Understand the difference between a spot contract and a futures contract, and gain technical know-how of commodity exchange-traded futures contracts.</li><li>Identify the factors or determinants influencing the commodity futures price and spot price relationship.</li><li>Assess the commodity futures efficiency in hedging price risks and hedging effectiveness, especially for mentha value chain actors, using mentha oil’s futures and spot price data.</li><li>Apply knowledge of the commodity futures market and data analysis in portfolio and price risk management.</li></ul>

• commodity futures
• price discovery
• mentha oil
• hedging