ACKNOWLEDGEMENT

I feel great pleasure in expressing my regards and profound sense of gratitude to the people who have extended their help in every possible way. Help is a voluntary fulfillment of duty, which, all the people mentioned below have performed it to their maximum possible, in a way giving us & our research the utmost important. I take this opportunity to thank the University of Mumbai for giving me chance to do this project. I am highly indebted to my faculty guide PROF.ABDUL KADIR KHAN for his guidance and constant supervision as well as for providing necessary information regarding the project & also for their support in completing the project. He has taken pain to go through the project and make necessary correction as and when needed. At the onset, I wish to express my gratitude to Miss. SUCHETA PAWAR, Academic Coordinator, and Miss. Dr. MADHAVI S. PETHE, Principal for constant support in completing this project successfully. I would also thank my Institution for making us available well equipped computer lab and library which was very helpful as well my faculty members without whom this project would have been a distant reality. I also extend my heartfelt thanks to my family and well wishers. I also like to express my sincere thanks to the authors for providing us with scholarly articles & websites for providing us the related information to our projects subject.

EXECUTIVE SUMMARY

ommodities are basic necessities of every body but due to the modern technology, globalization, liberalization, commodities have become a

huge market across the world with regards to commodity trading. Commodities markets are maturing day by day as well gaining importance in constitution of the financial market. Regulators such as NMCE, NCDEX, MCX etc. were built so that the markets work smoothly. Its one of the oldest market in the world. Different web based literature has been studied to understand which are the major players of commodity markets in the world? And what is their way of operation? Which are the major commodity exchanges in India? What is their modus operandi? While surveying various web site we came to know the whole commodity market and the exchange takes place in this market is broadly classify into two principle categories that is agriculture and non agriculture commodity market. The perspective of commodity market in which active and passive mode of commodity market, volatility, liquidity of commodity market and their relation with economy are discussed. Benefits of future commodity markets to agriculturists, farmers are discussed in brief along with price discovery, price risk management, importexport competitiveness, improved product quality-market transparency etc. are discussed. The attractive features of commodity market, various instruments those are available in the market are listed. Participants of the commodity market those are hedgers, speculators and arbitrators their power and limitations, functioning etc. are described in brief.

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A complete working and delivery process of commodity market including various stages are clearly mentioned with the use of flow chart. Spot trade and future trade are also explained well. Investing in commodities are very good option but there are risk involved in it as involved in any investment. In order to avoid such risk an investor should carefully examine the market before investing in any thing for this he should keep regular check of the market as the market fluctuates anytime which would result in huge profit or loses. So investing in commodities is risky for those who make it riskier. It is this emerging scenario that the investor must gear themselves to face. At the end unresolved issues of commodity market and future prospect of commodity market is noted down.

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ANNEXURE -1.1: Questionnaire

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NAME:____________________________________________________

1. Are you aware about the commodity markets? YES NO

2. What are the various sources of information on commodity markets? NEWSPAPERS THROUGH BROKER OTHERS NEWS CHANNELS FAMILY FRIEND

3. Do you advise commodity market products to your investors? YES NO

4. Why are you not trading into the commodity market? Lack of understanding Lack of guidance from brokers No option for long term investment Ware housing problem Influences of macro-economic factors (interest factors) Big losses-Big lots others

5. If yes, then which commodity you mainly trade? Gold/silver/copper Agriculture products crude oil others 6. What is your purpose for trading into the commodity markets? Speculation Hedging Investment Arbitrage Others

7. Which factors are affecting commodity market the most? Monsoon Crop harvesting Political Demand supply scenario Spot prices Others 8. What is the scope of commodity futures in India? Cant say Not so bad Good

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