Commodity Exchange

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A Study on COMMODITIES MARKET in india
in partial fulfillment for the award of the degree
of

Master of Business Administration

By
Bethi Navatha Kumari

in

[pic]
school of management studies
Jawaharlal nehru Technological university
Kukatpally, hyderabad
June 2009

Acknowledgement

Apart from the efforts of me, the success of this project depends largely on the encouragement and guidelines of many others. I take this opportunity to express my gratitude to the people who have been instrumental in the successful completion of this project.

I would like to show my greatest appreciation to Dr. SINDHU, Associate Professor, School of Management Studies, JNTU and for the tremendous support and help. Without her encouragement and guidance this project would not have materialized.

Navatha. B

TABLE OF CONTENTS

|Chapter |TOPIC |PAGE NO | |Chapter 1 |INTRODUCTION | 4 | | |Research design | 8 | | |Methodology | 9 | |Chapter 2 |TRENDS IN INDIAN COMMODITY MARKET | 11 | |Chapter 3 |COMPARATIVE STUDY OF STOCK MARKET INDICES AND COMMODITY MARKET INDICES | 14 | |Chapter 4 |ANALYSIS OF PERCEPTION OF RETAIL INVESTORS ON COMMODITY MARKET | 29 | | |FINDINGS AND CONCLUSIONS41 | | | |BIBILIOGRAPHY | | | |ANNEXURE | |

CHAPTER 1
INTRODUCTION
India, a commodity based economy where two-third of the one billion population depends on agricultural commodities, surprisingly has an under developed commodity market. Commodity includes all kinds of goods. FCRA defines "goods" as "every kind of movable property other than actionable claims, money and securities". Futures' trading is organized in such goods or commodities as are permitted by the Central Government. At present, all goods and products of agricultural (including plantation), mineral and fossil origin are allowed for futures trading under the auspices of the commodity exchanges recognized under the FCRA. The national commodity exchanges have been recognized by the Central Government for Organizing trading in all permissible commodities which include precious (gold & silver) and nonferrous metals; cereals and pulses; ginned and unginned cotton; oilseeds, oils and oilcakes; raw jute and jute goods; sugar and gur; potatoes and onions; coffee and tea; rubber and spices, etc. A commodity exchange is an association, or a company or any other body corporate organizing futures trading in commodities. Commodities actually offer immense potential to become a separate asset class for market-savvy investors, arbitrageurs and speculators. Retail investors, who claim to understand the equity markets, may find commodities an unfathomable market. But commodities are easy to understand as far as fundamentals of demand and supply are concerned. Retail investors should understand the risks and advantages of trading in commodities futures before taking a leap. Historically, pricing in commodities futures has been less volatile compared with equity and bonds, thus...
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