Investing in comodities


Metals, gold, agri products, coffee are most popular investment options according to an Assocham study which also reveals that 34% of common investors pump Rs. 10 lakh per annum into commodity trading.

A long, record-breaking performance by the stock markets not with standing , it is the commodities that is fast gaining acceptance among Indian investors – common, retail ones at that.

An industry survey, conducted by industry body Assocham, has found that as much as 34% of all common investors spend around Rs. 5-10 lakh per annum in the commodities market while another 13% prefer to invest way over Rs. 10 lakhs annually in them.

Over 240 market players engaged in channeling investor surpluses in various savings instruments were surveyed by the industry chamber in the cities of Mumbai, Delhi, and other metros of India.

It was found that about 24% of the respondents choose to park only Rs. 1 lakh to Rs. 5 lakh in commodities market, while 3% opt for investing in futures commodities market at less than Rs. 1 lakh.

The remaining 26%, however, turned out to be those that didn’t clarify their preference.

METALS: A hot favorite

The findings pointed out that 15% of respondents prefer investing in metals. This is because there is an increase in demand for metals as a consequence of the boom in the real estate and automobile markets of China and India.

There is also a growing demand from the develop nations where, due to the pollution factor, several mines have been shut down.

It was also noted that 14% of the respondents are investing in agro-products because there is an uncertainty on the supply side while the demand for local for local and overseas consumption is more.

Therefore, traders are more than willing to invest in agri products and earn an assured higher profit. Other prominent investment avenues turned out to be foreign currencies coffee and rubber.

In futures, gold and silver are most sought after with 32% of the respondents choosing to invest in them.

COMMODITIES: A Rising star

Currently, 120 commodities are being traded in the commodities futures market at three national commodities exchange – Multi Commodity Exchange of India (MCX), National Commodity & Derivatives Exchange (NCDEX) and the National Multi-Commodity Exchange (NMC) – and 24 regional exchanges.

On an average, each day, Rs 15,000 crores of business is transacted at these exchanges which came into being about eight years ago.

Cash and Commodities


OVER RS 10 LAKH—————————13%
RS 5 – 10 LAKH——————————34%
RS 1 – 5 LAKH——————————-24%
LESS THAN A LAKH————————–3%
NO ANSWER———————————26%.