Commodity prices

There are variables that influence the commodity prices in India. It all depends on the circumstances that surround each commodity type in general. While there are over 100 commodities registered for trading on the commodity exchange, yet they are placed into broader based categories. For instance, plantations, cereals, bullion, oil and oilseeds, energy, etc.

Taking into account a few of the categories, beneath each heading is listed some of the common variables that determine the commodity prices…

Bullion:
-Sales by central banks, reclaimed scrap and gold loans
-Producer or the miner hedging interest
-Foreign exchange rates
-Returns on the stock markets
-Domestic demand

Oil and oilseeds:
-Weather conditions domestic and international.
-Seasonal cycle
-International price fluctuation
-Calamities
-Pest-destruction
-Plantation diseases
-Supply-demand scenario


Spices:
-The quality of production
-Storing and processing
-The quantity of production
-Export-import scenario
-Weather conditions
-Seasonal cycle
-Year ending stocks
-stocks-to-consumption ratio


Metal:
Economical scenario
Domestic demand and supply
International prices
Government policies
The duty imposed
Prices of input materials, which includes:
Power tariff
Freight rates
Coal prices

Energy and Petrochemicals:
-Changes in global prices
-Economic growth
-Industrial development
-International consumption and demand ratio
-Government policies