COMMODITIES :- A commodity is a basic good used in

commerce that is interchangeable with other

commodities of the same type. Commodities are
most often used as inputs in the production of other
goods or services. The quality of a given commodity
may differ slightly, but it is essentially uniform across
producers. When they are traded on an exchange,
commodities must also meet specified minimum
standards, also known as a basis grade

BULLIONS:- Bullion is gold and silver that is officially

recognized as being at least 99.5% pure and is in the
form of bars or ingots rather than coins. To create
bullion, gold first must be discovered by mining
companies and removed from the earth in the form of
gold ore, a combination of gold and mineralized rock.
The gold is then extracted from the ore with the use
of chemicals or extreme heat. The resulting pure
bullion is also called "parted bullion." Bullion that
contains more than one type of metal is called
"unparted bullion."

Gold
Gold mini
Gold guinea
Gold petal
Gold global
Silver
Silver mini
Silver micro
Silver 1000

Gold is the oldest precious metal known to man and for

thousands of years it has been valued as a global currency, a
commodity, an investment and simply an object of beauty.
Gold, the most sought-after of all precious metals, is
acquired throughout the world for its beauty, liquidity,
investment qualities, and industrial properties. As an
investment vehicle, gold is typically viewed as a financial
asset that maintains its value and purchasing power during
inflationary periods

Factors Influencing the Market

Above-ground supply of gold from central bank
sales, reclaimed scrap, and official gold loans.

Hedging interest of producers and miners.

World macroeconomic factors, such as movement in

the dollar and interest rate, and economic events

In India, gold demand is also influenced by

seasonality, that is, marriage and harvesting.

Aluminium
Aluminium mini
Copper
Copper mini
Lead
Lead mini
Nickel
Nickel mini
Zinc
Zinc mini

BASE METALS:- Aluminium is a chemical element in the boron

group with symbol Al and is the most widely used nonferrous metal. Ancient Greeks and Romans used aluminium
salts as dyeing mordents and as astringents for dressing
wounds. It is a silvery white, soft, ductile metal. It makes up
about 8% by weight of the earth's solid surface and after
oxygen and silicon, the third most abundant of all elements
in the earth's crust. Because of its strong affinity to oxygen, it
is not found in the elemental state but only in combined
forms, such as oxides or silicates. The metal derives its name
from alumen, the Latin name for alum.

Aluminium is theoretically 100% recyclable without any loss of

its natural qualities. According to the International Resource
Panel's Metal Stocks in Society report, the global per capita
stock of aluminium in use in society (that is in cars, buildings
and electronics) is 80 kg. Much of this is in more developed
countries (350 kg500 kg per capita) rather than in lessdeveloped countries (35 kg per capita). Knowing the per
capita stocks and their approximate lifespans is important for
planning recycling. By consumption, aluminium is next to
steel.

Factors Influencing the Market

Prices ruling in the international markets
Indian rupee and US dollar exchange rates
Economic factors: industrial growth, global financial crisis,
recession, and inflation
Commodity-specific events: construction of new production
facilities or processes, new uses or the discontinuance of
historical uses, unexpected mine or plant closures (natural
disaster, supply disruption, accident, strike, and so forth),
and industry restructuring
Government trade policies (implementation or suspension of
taxes, penalties, and quotas)
Geopolitical events

Factors Influencing the Market

Prices ruling in the international markets
Indian rupee and US dollar exchange rates
Economic factors: industrial growth, global
financial crisis, recession, and inflation
Commodity-specific events: construction of new
production facilities or processes, new uses or the
discontinuance of historical uses, unexpected mine
or plant closures (natural disaster, supply
disruption, accident, strike, and so forth), and
industry restructuring
Government trade policies (implementation or
suspension of taxes, penalties, and quotas)
Geopolitical events

In world metal consumption, copper ranks third

after steel and aluminium. It is a product whose
fortunes directly reflect the state of the world's
economy, hence also dubbed as Dr Copper.

Copper, the best non-precious metal conductor of

electricity, has exceptional strength, ductility, and
resistance to creeping and corrosion to make it the
preferred and safest conductor of electrical wiring in
buildings. Economic, technological, and societal factors
influence the supply and demand of copper. Landbased resources are estimated at 1.6 billion tonnes of
copper, and resources in deep-sea nodules are
estimated at 0.7 billion tonnes. Worldwide,
approximately one-third of all copper consumed is
recycled copper.

Factors Influencing the Market

Indian copper prices reflect prevailing international spot
market and the USDINR exchange rates.
Commodity-specific events, such as the construction of
new production facilities or processes, new uses or the
discontinuance of historical uses, unexpected mine or
plant closures (natural disaster, supply disruption,
accident, strike, and so forth), or industry
restructuringall affect the price of the metal.
Trade policies set by the government (implementation
or suspension of taxes, penalties and quotas) affect
supplies as they regulate (restricting or encouraging)
material flow.

Lead has been in use for thousands of years because it is

easy to get from the ground and easy to shape and work
with. It was used by the Romans for pipes, drinking vessels,
and fasteners. Lead is a shiny, gray-blue metal that gets
tarnished easily to a dull gray colour. It is soft and malleable
and is very shiny when molten and is very heavy. It is also
corrosion-resistant. Lead is found very rarely in the earth's
crust as a metal. Galena is the main lead ore. It is usually
found in association with zinc, silver, and copper ores. It is
one of the most sustainable and recyclable commodities. It
can be recycled indefinitely, without loss of its physical or
chemical properties.

Lead is principally used for manufacturing batteries,

especially the ones used in automobiles, motorcycles,
and electric cars. Its incredible density provides
protection from radiation and is used in hospitals,
dental surgeries, laboratories, and nuclear installations.

Factors Influencing the Market

Lead prices in India are fixed based on the rates in the
international spot market, and the Indian rupeeUS
dollar exchange rates.
Economic events such as national industrial growth,
global financial crisis, recession, and inflation, affect the
metal prices.
Commodity-specific events, such as the construction of
new production facilities or processes, unexpected mine
or plant closures (natural disaster, supply disruption,
accident, strike, and so forth), or industry restructuring,
affect metal prices.
Trade policies set by the government affect supply as
they regulate material flow.

Nickel is a naturally occurring, lustrous, silvery-white

metal. It is the fifth most common element on earth and
occurs extensively in the earth's crust. However, most of
the nickel is inaccessible in the core of the earth. Some
of the key characteristics of nickel are its high melting
point, resistance against corrosion and oxidation,
ductility and catalytical properties, ease of deposit by
electroplating and formation of alloys readily. Nickel
plays an important role in our daily lives, making its way
in myriad objects around us like food preparation
equipment, mobile phones, medical equipment,
transport, buildings, and power generationthe list is
almost endless. There are about 3000 nickel-containing
alloys in everyday use.

Nickel gets precedence over other metals because

it offers better corrosion resistance, better
toughness, and better strength at high and low
temperatures; it also provides a range of special
magnetic and electronic properties.

Factors Influencing the Market

Prices ruling in international markets.
Indian rupee and US dollar exchange rates.
Economic events such as national industrial growth,
global financial crisis, recession, and inflation, affect the
metal prices.
Commodity-specific events, such as the construction of
new production facilities or processes, unexpected mine
or plant closures (natural disaster, supply disruption,
accident, strike, and so forth), or industry restructuring,
affect metal prices.
Geopolitical events.

Zinc is the fourth most widely used metal in the world

after steel, aluminium, and copper. It is hard and brittle
at most temperatures, but becomes malleable between
100 C and 150 C. It is a fair conductor of heat and
electricity and burns with a bright bluish-green flame,
giving off zinc oxide fumes. Zinc occurs naturally in the
earth's crust and is the 24th most abundant element,
with about 1.9 billion tonnes of identified resources. It
is an essential trace element and necessary for plants,
animals, and microorganisms. However, high levels of
zinc exposure through inhalation, ingestion, and dermal
contact could cause adverse health effects.

Factors Influencing the Market

Zinc prices in India are fixed based on the rates
that rule in the international spot market, and INR
USD exchange rates.
Economic events, such as the national industrial
growth, global financial crisis, recession, and
inflation, affect metal prices.
As societies develop, their demand for metal
increases based on their current economic
position, which could also be referred to as
national economic growth factor.

Energy commodities such as crude are closely watched by

countries, corporations and consumers alike. The average
Western consumer can become significantly impacted by high
crude prices. Alternatively, oil-producing countries in the
Middle East (that are largely dependent on petrodollars as
their source of income) can become adversely affected by low
crude prices. Unusual disruptions caused by weather or
natural disasters can not only be an impetus for price
volatility, but can also cause regional food shortages. Read on
to find out about the role that various commodities play in
the global economy and how investors can turn economic
events into opportunities.

Crude oil
Crude oil mini
Brent crude oil
Natural gas

Crude oil is a naturally occurring, unrefined petroleum

product composed of hydrocarbon deposits in natural
underground pools or reservoirs and remains liquid at
atmospheric pressure and temperature. Although it is
often called "black gold," crude oil has a wide ranging
viscosity and can vary in colour to various shades of
black and yellow depending on its hydrocarbon
composition. Crude oil can be refined to produce usable
products such as gasoline, diesel and various forms of
petrochemicals.

Even though most crude oil is produced by a

relatively small number of companies, and often in
remote locations that are very far from the point of
consumption, trade in crude oil is both robust and
global. Nearly 80% of international crude oil is
transported through waterways in super tankers.

Factors Influencing the Market

OPEC output, supply, and spare capacities
US crude and products inventories data
Weather conditions
Increased demand from emerging and developing
countries; geopolitics
Speculative buying and selling

Brent Crude oil, extracted from the North Sea, is a sweet

light crude oil with less than 0.4% of sulphur and an API
gravity of 30 API. It is light because of its relatively low
density, and sweet because of its low sulphur content. In fact
these are the two main characteristics by which crude oil are
classified-sulphur content and density-which the petroleum
industry measures by its American Petroleum Institute (API)
gravity. Brent Crude is a mix of crude oil from 15 different oil
fields in the North Sea and comprises Brent Blend, Forties
Blend, Oseberg and Ekofisk crudes. The Brent Crude
benchmark is known as the Brent Blend, London Brent, or
Brent petroleum.

Brent is the leading global price benchmark for

Atlantic basin crude oils. Originally, Brent Crude
was produced from the Brent oilfield. The name
Brent comes from the naming policy of Shell UK
Exploration and Production, which originally named
all its fields after birds (in this case the brent
goose).

West Texas Intermediate (WTI) crude oil is of very high

quality. Its API gravity is 39.6 degrees (making it a "light"
crude oil), and it contains only about 0.24 percent of sulphur
(making a "sweet" crude oil). WTI is generally priced at about
a $2-4 per-barrel premium to OPEC Basket price and about
$1-2 per barrel premium to Brent, although on a daily basis
the pricing relationships between these can very greatly.
Brent Crude Oil stands as a benchmark for Europe.
India is very much reliant on oil from the Middle East (High
Sulphur). The OPEC has identified China & India as their main
buyers of oil in Asia for several years to come.

Oil accounts for 40 per cent of the world's

total energy demand.
The world consumes about 76 million
bbl/day of oil.
United States (20 million bbl/d), followed by
China (5.6 million bbl/d) and Japan (5.4
million bbl/d) are the top oil consuming
countries.
Balance recoverable reserve was estimated at
about 142.7 billion tones (in 2002), of which
OPEC was 112 billion tones.

OPEC stands for 'Organization of Petroleum

Exporting Countries'. It is an organization of
eleven developing countries that are heavily
dependent on oil revenues as their main source
of income. The current Members are Algeria,
Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria,
Qatar, Saudi Arabia, the United Arab Emirates
and Venezuela.
OPEC controls almost 40 percent of the world's
crude oil.
It accounts for about 75 per cent of the world's
proven oil reserves.
Its exports represent 55 per cent of the oil traded
internationally.

India ranks among the top 10 largest oil-consuming countries.

Oil accounts for about 30 per cent of India's total energy
consumption. The country's total oil consumption is about 2.2
million barrels per day. India imports about 70 per cent of its
total oil consumption and it makes no exports.
India faces a large supply deficit, as domestic oil production is
unlikely to keep pace with demand. India's rough production was
only 0.8 million barrels per day.
The oil reserves of the country (about 5.4 billion barrels) are
located primarily in Mumbai High, Upper Assam, Cambay,
Krishna-Godavari and Cauvery basins.
Balance recoverable reserve was about 733 million tones (in
2003) of which offshore was 394 million tones and on shore was
339 million tones.
India had a total of 2.1 million barrels per day in refining
capacity.

Natural gas is a vital component of the

world's energy supply. It is one of the
cleanest, safest, and the most useful of all
energy sources. Given its growing resource
base and relatively low carbon emissions
compared with other fossil fuels, natural gas
is likely to play a greater role in the world
energy mix.

International natural gas inventory data

US weather conditions
Price of crude oil
Industrial and residential demand in the U.S.

Agricultural commodity, as used in this

subchapter, means wheat, cotton, flax, corn,
dry beans, oats, barley, rye, tobacco, rice,
peanuts, soybeans, sugar beets, sugar cane,
tomatoes, grain sorghum, sunflowers, raisins,
oranges, sweet corn, dry peas, freezing and
canning peas, forage, apples, grapes,
potatoes, timber

Cardamom
Cotton
Crude palm oil
Kapas
Mentha oil

The origins of cardamom are unknown, yet it is

believed that it grew as wild herbs in the
monsoon forests of the Western Ghats in
southern India. Cardamom finds its first mention
in the Charak Samhita (an early text on Ayurveda)
written somewhere between 2nd century BC and
2nd century AD. The Charak Samhita says that
cardamom is an important constituent in many
medicines. Later, the spice finds mentions in
many Sanskrit texts as being used in rituals and
ceremonies.

Freshness, colour, aroma, and size of the crop

Production in competing countries, mainly
Guatemala
Annual production in India
Year-ending stocks at India and Guatemala
Seasonal variations and time of arrival of new crop
in the market
Domestic consumption, which is influenced by
festivals

The use of cotton for fabric is known to date to

prehistoric times; fragments of cotton fabric dated from
5000 BC have been excavated in Mexico and the Indus
Valley Civilization. The Indus cotton industry was well
developed and some methods used in cotton spinning
and fabrication continued to be used until the
industrialization of India. Between 2000 and 1000 BC
cotton became widespread across much of India. For
example, it has been found at the site of Hallus in
Karnataka dating from around 1000 BC.

The domestic demand supply scenario, inter-crop price

parity, cost of production, and international price situation
are the major factors that influencing prices in the market.
Weather, pests, diseases and other risk factors associated
with agricultural crops also have a bearing on cotton
production.
Government policies on import, export, and minimum
support price are significant influencers of cotton prices.
Cotton yarn prices in different markets across the country
show a high correlation of above 90% with India's raw
cotton prices.
Global trade is particularly important for cotton. In
addition to around 30% of the global cotton fibre produced
being traded, it is also traded indirectly as yarn, fabric and
clothing.

Palm oil (also known as dend oil, from Portuguese) is an

edible vegetable oil derived from the mesocarp (reddish pulp)
of the fruit of the oil palms, primarily the African oil palm
Elaeis guineensis, and to a lesser extent from the American
oil palm Elaeis oleifera and the maripa palm Attalea maripa.
Palm oil is naturally reddish in colour because of a high betacarotene content. It is not to be confused with palm kernel oil
derived from the kernel of the same fruit, or coconut oil
derived from the kernel of the coconut palm. The differences
are in colour (raw palm kernel oil lacks carotenoids and is not
red), and in saturated fat content; palm mesocarp oil is 41%
saturated, while palm kernel oil and coconut oil are 81% and
86% saturated respectively.

International factors
Indonesia and Malaysia are the major producing and
exporting nations. Adverse weather conditions for palm
output have an effect on the prices. Wide fluctuations in
the currencies of Indonesia and Malaysia also affect palm
prices.
Indonesian and Malaysian government policies related with
export tax have an effect on the prices.
Since soyoil competes with palm oil in the global vegetable
oil market, hence global production, consumption and
ending stocks of soya bean and other oilseeds have direct
bearing on prices.
Crude oil movement also affects prices, as significant rise
in energy prices lead to demand for alternate fuels like
biofuel. Vegetable oils are also used in the production of
biofuel.

Domestic factors
Rupee movement
Ending stocks
Domestic oilseed production
Policies, particularly import duties
Economy. Well-being of final consumer
CIRCULARS

Kapas is unginned cotton or the white fibrous

substance covering the seed that is obtained from
the cotton plant. Ginning separates the lint (about
one-third in weight) from the seed (two-thirds in
weight). Lint, commonly known as rui in Hindi, is
the raw material used for manufacturing of cotton
yarn or thread, which is further woven to make
fabrics.

Cotton's strength, absorbency, and capacity to be

washed and dyed makes it adaptable to a
considerable variety of textile products. Cotton
seed is crushed to make cottonseed cake, which is
used in livestock feed; and cottonseed oil which is
the 5th major edible oil consumed in the world.

The domestic demand supply scenario, inter-crop price

parity, cost of production, and international price situation
are the major factors that influencing prices in the market.
Weather, pests, diseases and other risk factors associated
with agricultural crops also have a bearing on cotton
production.
Government policies on import, export, and minimum
support price are significant influencers of cotton prices.
Cotton yarn prices in different markets across the country
show a high correlation of above 90% with India's raw
cotton prices.
Global trade is particularly important for cotton. In
addition to around 30% of the global cotton fibre produced
being traded, it is also traded indirectly as yarn, fabric and
clothing.

Mentha is an aromatic herb, which also goes by the

name Japanese pudina in India. Steam distillation
and filtration of dried Mentha arvensis leaves
produces mentha oil, which can be processed to
yield menthol and other derivatives. Mentha oil and
its derivatives are extensively used in food,
pharmaceutical, perfumery, and flavouring
industry.

Mentha oil prices have always been quite volatile.

In the last few years, India has emerged as an
export hub for mentha oil and its derivatives,
exposing exporters to high price volatility. Due to
the presence of a liquid futures contract on MCX,
the value chain participants are able to hedge this
price risk on the MCX platform.

International factors Import demand from major importing

countries such as China, the U.S., and Singapore.
USDINR rate, the commodity being export-oriented.
Price of synthetic mentha oil in international market.
Domestic factors Production related

Consumption

Mentha oil price is influenced by an increase or decrease in the

mentha crop acreage which depends on the climate during sowing
and the price realization in the previous season.
Prevailing weather conditions; the incidence of cold wave and
heavy rains are harmful during leaf formation.
Quantum of arrivals during the harvest season.
Domestic demand from pharmaceutical companies which usually
increases in winter
Export demand from importing countries