123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Investing---Finance >> View Article

The Importance Of Commodity Market In India

Profile Picture
By Author: Swapnil Kelkar
Total Articles: 1
Comment this article
Facebook ShareTwitter ShareGoogle+ ShareTwitter Share

Commodity Markets have existed from over 100 years in India while the official commodity Exchange-traded mechanism opened in India in late 2003 some of the important aspects of commodity market in our country are explained below.

First is to achieve food security through commodity markets, in this line there comes a question in mind that how does government achieve food security through commodity markets? A recent report about grains worth Rs 800 crore were destroyed in Punjab due to bad warehousing. Currently, this is the risk that farmer is forced to take the benefit to these farmers is that they can make use of futures markets in an effective way selling futures on their by locking a price this will ensure that the farmers are nor affected by price fluctuations. One of the big challenges in this sector is the absenteeism of post-harvest infrastructure due to which as a result the substantial amount of food grains are lost in the transmission process in which the price situation is degraded in which farmer is without benefit.

Commodity segment provides long investment classes for Indian Investors that has been limited to the traditional gold, FD's and equities while investors have participated in commodities through the Equity market mechanism those traders do not participate directly in commodity as an asset class in the process they are also able to make choices or have a largely variety of choices for traders. These Investors can participate in agricultural products or even in precious metals like gold and silver.

The final and most important function of the commodity market is helping in the distribution of risk and protection of the origin from where the risk is originated. For Example we take the case of a jewelry manufacturer who wants hedging against gold price volatility in agricultural products and can also use future markets as the hedge position, commodity markets in India are still in a stage in which it has a long way to go and also have an important role in discovering the price and hedging the risk of MCX market in India.

Total Views: 61Word Count: 345See All articles From Author

Add Comment

Investing / Finance Articles

1. Btc Trading Inc Review: Ethereum Eth Proof Of Stake
Author: btctradingincreview

2. What Is Difference Between Demat Account And Trading Account?
Author: Maithili Pawar

3. What Is Dematerialisation?
Author: Maithili Pawar

4. What Is Demat Account Number?
Author: Maithili Pawar

5. What Are The Stock Exchanges Operating In India?
Author: Maithili Pawar

6. Can We Get Personal Loan Without Documents And How ?
Author: Suresh Chand Tanwar

7. Personal Financial Planning Tips With Low Interest
Author: Suresh Chand Tanwar

8. How To Get A Personal Loan For Students In India ?
Author: Suresh Chand Tanwar

9. Buy Your Home By Availing New Jersey Home Mortgage Loan
Author: First Choice Loans Services Inc.

10. Earn By Short Term Trading
Author: Rahul Rai

11. Should You Sign As A Loan Guarantor ?
Author: Suresh Chand Tanwar

12. The Gradual Set Up Of Investment Banking In India
Author: Avendus

13. Is It Possible To Earn Money From A Website?
Author: Melissa charm

14. Moment Payday Loans: Effective Source To Heal Unwanted Emergency Stress
Author: Installment Money Loans

15. The Best Mobile Payment App For Online Landline Bill Payment-xpay.life
Author: XPay Life

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: