commodity market pdf

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INTRODUCTION
1.1 History of Commodity Market in India
The history of organized commodity derivatives in India goes back to the nineteenth
century when Cotton Trade Association started futures trading in 1875, about a decade
after they started in Chicago. Over the time datives market developed in several
commodities in India. Following Cotton, derivatives trading started in oilseed in Bombay
(1900), raw jute and jute goods in Calcutta (1912), wheat in hapur (1913) and Bullion in
Bombay (1920).
However many feared that derivatives fuelled unnecessary speculation and were
detrimental to the healthy functioning of the market for the underlying commodities,
resulting in to banning of commodity options trading and cash settlement of commodities
future after independence in 1952. The parliament passed the Forward contracts
(Regulations) Act, 1952, which regulated contracts in commodities all over the India.
The commodities future market remained dismantled and remained dormant for about
four decades until the new millennium when the government, in a complete change in a
policy, started actively encouraging commodity market. After Liberalization and
Globalization in 1990, the government set up a committee (1993) to examine the role of
futures trading.
Types of commodities market:
Majorly there are two types
Ø Whole sale Market
Ø Retail Market
Commodity definition
“A physical substance, such as food , grain and metals, which is interchangeable with
another product of the same type and which investors buy or sell, usually through future
contracts.” The price of the commodity is subject to supply and demand. Risk is actually
the reason exchange trading of the basic agricultural products began.

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For example – A farmer risk the cost of producing a product ready for market at
sometimes in the future because he doesn’t know what the selling price will be. More
generally, a product which trades on a commodity exchange; this would also include
foreign currencies and financial instruments and indexes. A commodity exchange is a
place where various commodities and derivatives are bought and sold. Commodities
exchanges usually trade on commodity futures. Now here we are giving a set of questions
to understand the basic concepts of the commodity markets. This will be useful for the
people who are doing trading for the first time in commodity market. The exchanges are
regulated themselves with the regulator. The FMC deals wit exchange administration and
will seek to inspect the books of brokers only if foul practices are suspected or if the
exchange themselves fail to take action. Ina sense, therefore, the commodity exchanges
are more self – regulating than stock exchanges.
For conducting trade in commodity futures there are three options – the “National
Commodity and Derivative Exchange” , the Multi Commodity Exchange of India Ltd”
and the “ National Multi Commodity Exchange of India Ltd” . All three have electronic
trading and settlement systems and a national presence. The minimum investment needed
is an amount as low as Rs.500. All that needed is money for margins payable upfront to
exchanges through brokers. The margins range from 10 percent of the value of the
commodity contracts. For trading in bullion, i.e , gold and silver , the percentage remain
same but the total amount charges according to the change in market price . The prices
and trading lots in agricultural commodities vary from exchange to exchange (in kg,
quintals or tones) , but again the minimum funds required to begin will be approximately
Rs 500.
All the exchange has both cash and delivery mechanisms. If the investors want the
contract to be cash settled, he has to indicate at the time of placing the order that he don’t
intend to deliver the item. If the investors plan to take or make delivery, he needs to have
the required ware houses receipts.

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More over if he wants to take delivery to tell at least before 5 or 6 days before the expiry
date so that the proper money can be sent and the required adjustments can be made at
the warehouse. For taking the delivery the “TIN NO” and “GIR NO” is required.
Moreover in the delivery the commission increases and the sales tax is also applicable.
For starting trading in commodity futures the investors need only one bank account and a
separate commodity demand account from the Multi- commodity exchange to trade on
the MCX just like its stock. The other requirements that are needed at broker level are the
customers will have to enter into a normal account agreements with the broker. These
include the procedure of the Know Your Client format that exist in equity trading and
terms of conditions of the exchange and broker. Besides the investors will need to give
the details such as PAN no., bank account no, etc.
The brokerage charges are 0.5 Ps per 100 Rs for intraday trading and if investors want to
take the delivery then he has to pay 0.50Ps per 100 Rs. The transaction charges are 0.1%
and it is same for all commodities.
The information on commodities can be seen in daily financial newspapers which carry
spot prices and relevant news and articles on most commodities. Besides, there are
specialized magazines on agricultural commodities and metals available for subscription.
Brokers also provide research and analysis support. But the information easiest to access
is from websites. Though many websites are subscription- based, a few also offer
information for free. Anybody can surf the web and narrow down you search. The
exchanges are regulated by the Forward Markets Commission. Unlike the equity markets,
brokers don’t need to register themselves with the regulator.
The commodities market will have three broad categories of market participants apart
from brokers and the exchange administration – hedgers, speculators, and arbitrageurs.
Brokers will intermediate, facilitating hedgers and speculators. Hedgers are essentially
players with an underlying risk in a commodity- they may be either producers or
consumers who want to transfer the price- risk onto the market. Producer- hedgers are
those who want mitigate the risk of prices declining by the time they actually produce
their commodity for sale in the market.

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1.2 Industry Profile
Multi Commodity Exchange (MCX)
Overview
The Multi Commodity Exchange of India limited (MCX), India’s first listed exchange, is
a state of the art , commodity futures exchange that facilitates online trading , and
clearing and settlement of commodity future transaction, thereby providing a platform for
risk management. The Exchange, which started operations in November 2003, operates
within the regulatory framework of the Forward Contracts (Regulation) act 1952.
MCX offers trading in varied commodity futures contracts across segments including
Bullion, Ferrous and Non-Ferrous metals, energy and agricultural commodities. The
Exchange focuses on providing commodity value chain participant’s wit neutral, secure
and transport trade mechanism, and formulating quality parameters and trade regulations,
in conformity with the regulatory frameworks. The Exchange has an extensive nation
reach, with over 2000 members, operations through more than 468,000 trading terminals
(including CTCL), spanning over 1900 cities and towns across India. MCX is India’s
leading commodity futures exchange with a market share of 81% in terms of the value of
commodity futures contracts traded in Q1 Financial year 2015-2016.
MCX’s ability to use and apply technology efficiently is a key factor in the development
of its business. The exchange’s technology framework is designed to provide high
availability for all critical components, which guarantees continuous availability of
trading facilities. The robust technology infrastructure of the exchange, along with its
with rapid customization and development capabilities enables it to operate efficiency
with fast order routing, immediate trade execution, trade reporting, real time risk
management, market surveillance and market data dissemination.
MCX has been continuously raising the bar through effective research and product
development, intelligent use of information technology, innovative, thought leadership
and ethical business conduct.

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VISION & MISSION
Vision
We envision a unified Indian commodity market that is driven by market forces and
continually provides a level playfield for all stakeholders ranging from the primary
producer to the end-consumer, corrects historical aberrations in the system; leverages
technology to achieve exceptional efficiencies and ultimately lead to a common world
market. We also envision a brand image for MCX that identifies it as the Exchange of
choice not only by direct participants in the commodity ecosystem but also by the general
public.
Mission
MCX shall accomplish the above vision by relentlessly endeavoring to enhance
awareness and understanding to exchange enabled trade in commodity derivatives. The
exchange will continue to minimize the adverse effects of price volatilities; providing
commodity ecosystem participants with neutral, secure and transparent trade
mechanisms; formulating quality parameters and trade regulations in conjunction with the
regulatory authority. Moreover, it will continue to enforce a zero tolerance policy towards
unethical trade practices-attempted or real by any participants; and invest in the all-round
development of the commodity ecosystem.

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1.3 Five Different Commodities with Their Fluctuations Regarding Few Years
1.3.1 GOLD
It is the oldest precious metal know 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.
Introduction
• Gold is primarily a monetary asset and partly a commodity.
• Gold is the world’s oldest international currency.
• Gold is an important element of global monetary reserves.
• Less than one-third of gold’s total accumulated holdings are used as “commodity” for
jeweler in the western markets and industry
Demand and Supply
• World investment amounted to 2345 MT in 2013, broadly flat year on year, but the
approximate value of this demand reached a new record of almost $87 billion.
• In 2013, the gold mine production increased by 25MT to 3012 MT and combined
demand for bars and coins dropped from 1515 MT to 1256 MT.
Indian Scenario
• India, world’s largest market for gold jewellery and a key driver of the global gold
demand.
• The domestic drivers of gold demand are largely independent of outside forces. Indian
households hold the largest stock of world in India.
• Two-third of the Indian demand for gold comes from the rural parts of the country.
• In 2013, gold’s role as an inflation hedge bolstered its appeal in India.
• India imported around 1100 metric tonne (MT) of gold in 2013.

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Factors Influencing the Market
• Above ground supply of gold from central bank’s sale, reclaimed scarp, and official gold
loans.
• Hedging interest of producers / miners.
• World macroeconomics factors such as the US dollars, interest rates and economic
events.
• In India, the gold demand is also determined to a large extent by its price level and
volatility.
1.3.2 SILVER
Introduction
• Silver is a brilliant grey-white metal that is soft and malleable.
• Silver’s unique properties include its strength, malleability, ductility, electrical and
thermal conductivity and reactivity.
• The main source of silver is lead ore, although it can also be found associated with
copper, zinc, and gold produce as a by-product of base metal mining activities.
• Secondary silver sources include coin melt, scrap recovery, and dis-hoarding from
countries where export is restricted.
Demand and Supply
• In 2013, the worldwide silver fabrication demand was 876.6 million ounces (Moz)-down
by 1.5% from the value in 2012, but still reaching its second highest level since 2000.
• Globally, in 2014 the physical silver bar investment grew by 67% to 95.7 Moz, while
fabrication of coins and medals rose by almost 19% to an all-time high of 118.2 Moz.
• The world silver mine production increased by 1.4% to a new record level of 761.6 Moz
in 2014, as compared to previous year.

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Indian Scenario
• The average annual demand for silver in India is about 2500 metric tone (MT) per year.
• In 2014, the country’s production was around 342.13 MT.
• Nearly 60% of India’s silver demand comes from framers and rural India, who store their
savings in the form of silver bangles and coins.
• Economic events such as India’s industrial growth, the global financial crisis, recession
and inflation affect metal prices.
• Commodity-specific events such as the construction of new production facilities or
processes, unexpected mine or plant closure, or industry restructuring affect the market.
• A faster growth in demand against supply often leads to a drop in stocks with the
government and investors.
• In India, silver demand is also determined to a large extent by its price level and
volatility.
1.3.3 CRUDE OIL
Introduction
• Crude oil is a complex mixture of various hydrocarbons found in the upper layers of the
earths crust.
• Crude oil is often attributed as the “Mother of all Commodities” because of its
importance in the manufacturing of a wide variety of materials.
• Crude oil accounts for 35% of the world’s primary energy consumption.
• Crude oil is used to produce fuel for cars, trucks, airplanes, boats and train.

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Indian Scenario
• Oil accounts for 29% of India’s total energy consumption and there seems to be no
possibility of scaling down the dependence of these fuels.
• Crude oil production during the period April-march 2013 (provisional) was 38.19 million
metric tone (MMT), as compared with 37.71 MMT during the corresponding period last
year.
• India’s refining capacity stood at 193.39 MMTPA on January 1, 2013of which 116.89
MMT is in the public sector, 6.00 MMT in joint ventures, and the balance 70.50 MMTPA
in the private sector.
Price Moving Factor
• OPEC output, supply and spare capacities.
• Increased demand from emerging and developing countries; geopolitics.
• US crude and products inventories data.
• Currency fluctuations.
• Weather conditions.
• Speculative buying and selling.
1.3.4 NICKEL
Introduction
• Nickel is a metal with a bright future as it is the main alloying metal needed in the
production of certain types of stainless steel.
• The strength and life span of products manufactured using stainless steel are superior to
the one’s produced using non-stainless steels.
Demand and Supply
• World production of primary Nickel during 2014 was 1.612 million metric tone (MMT),
up by 11.53% as compared with 1.446 MMT in 2012. Whereas, the world’s consumption
during 2013was at 1.608 MMY vis-à-vis 1.465 MMT in 2012, up by 9.76%.

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Indian Scenario
• The annual demand for nickel in India is around 40,000 MT and its market in India is
totally dependent on imports.
• Nickel prices in India are fixed on the basis of the rates that rule on the international spot
market, and Indian rupee and US dollar exchange rates.
• Economic events such as national industrial growth, global financial crisis, recession and
inflation effect metal prices.
• Trade policy set by government affect supply as they regulate material flow.
• As societies develop, their demand for metal increases based on their current economics
position, which could also be referred as ‘National Economic Growth Factor’.
1.3.5 COPPER
Introduction
• Copper is a malleable and ductile metallic element that is an excellent conductor of heat
and electricity. It is also corrosion resistant and antimicrobial.
• It stands at the third place after steel and aluminium, in the context of consumption.
• Copper is an important contributor to the national economies of mature, newly developed
and developing countries.
• Copper is one of the most recycled of all metals. It is our ability to recycle metals over
again that makes them material of choice.
Demand and Supply
• In 2014, world’s copper mine production continued to underperform with respect to
capacity, and remained at the 2013 level of 16.005 million metric tone (MMY).
• In 2014, the global refined copper production was 19.630 MMT, up from 18.998 MMT in
2013.

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• The global refined copper consumption was 19.988 MMT compared with 19.375 MMT
in the previous year.
Indian Scenario
• In 2014, India’s production of refined copper is 689,312 MT, which is around 4% of the
total world production.
• Electric and electronic products industry has become India’s largest copper consuming
sector, accounting for 36% of the total Indian copper consumption.
• Copper price in India are fixed on the basis of the rates that rule in the international spot
market, and Indian rupee and US dollar exchange rates.
• Economic events such as the national industrial growth, global financial crisis, recession
and inflation metal prices.
• Geopolitical events involving governments or economic paradigms and armed conflict
can cause major changes.

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OBJECTIVES OF THE STUDY
2.1 Primary
Ø To study the people (educated and investors) Perception towards the commodity
market.
Ø To analyze the Investors Investment patterns due to fluctuations in commodities
market.
Ø To identify the specified product in the commodities market which was
performing a leading position when compared to five products chosen.
Ø To analyze the various factors which influence the performance of commodities
market?
Ø To understand Investors pattern at various duration of the year.
Ø To understand the behavior of the trader while selecting a commodity to invest
and how he is deciding that the selected commodity will give the expected return.
Ø To offer suggestions based on the study.
2.2 Secondary
Ø To know the different age groups opinion about commodity market
Ø To know the type of investment in which they are trading
Ø To know the main factor that influences the consumer to trade in commodity
market
2.3 Need for the Study
Study of customer’s perception towards commodity market wants to be performed to
know that what a trader was expecting from the commodity market and to understand the
trader behavior in decision making while selecting a particular commodity for his
investment in the commodity market. To find out the customers selection process and
what the steps are he was following to reduce the risks, The study will be helpful to
classify the people according their participation in the commodity market with respect to
their risk bearing capacity and also to identify what are the factors that influence the

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trader to participate actively in this commodity market. This study is also carried out to
bring out a specific product from all other products in this commodity market which was
highly prescribed by the trader and to know the factors that influencing the trader to
select that particular commodity.
It also concentrates to get a clear understanding about the commodity market to know
what is going on, what are the factors affecting the trader to invest in the commodity
market and also from where the investor getting advices regarding their investment.
Limitations of the Study
As customers are very busy and unable to share their opinions on modern company
services, thus the survey demand more times but the survey is restricted to less time.
The data is collected from the customers, some people are not showing interest to express
their ideas and feelings regarding the commodity market and also trading process.
Ø The information provided by the respondents on which all the results were drawn cannot
be denied that here was always a possibility of response error.
Ø The study was conducted within a time frame work of one two duration.
Ø The respondents feel reluctant about the survey conducted.

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RESEARCH METHODLOGY
Research can be defined as a systematic search for information on a particular topic.
Research is an academic activity and such the term should be used in a technical sense. A
design a specification of methods and procedures for acquiring the information needed,
structurally to solve the problems. Research design must be described as a series of
advance decisions that are taken together, from a model for the conduct of investigation
.For the study there should be a research design, so that the study is carried on
systematically.
3.1 Methodology
The purpose of any research is to find conclusion of a problem in systematic manner in
view of various types of employees or respondents. The research methodology includes
the following.
a) Source’s of data
b) Sampling
3.2 Sources of Data
Data is collected from two types of sources – primary and secondary data. Primary data is
which is collected for first time and without any reference. The data collected from past
record is known as secondary data. Both sources are used for collection of data.
Primary Data
This is collected through discussions and by interviewing the personnel concerned with
the brokers of the stock markets.
Secondary Data
This secondary data collected through the website www.MCXindia.com .

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3.3 Sampling Method
Questionnaire was used to collect primary data from the 50 respondents. Well balanced
and structural questionnaire was used as a tool for the present study. Convenience
sampling has been adopted for the present study. The questionnaires with questions of
general to specific aspects on Multi Commodities Exchange are used to get the relevant
information from the respondents.

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3.4 QUESTIONNAIRE
Name:
Age:
Phone number:
1) What is your occupation?
a) Government employee b) private employee c) student d) business man
e) Others
2) What is your annual income?
a) Below 50000 b) 50000 to 100000 c) 100000 to 300000 d) above 300000
3) Do you know about commodity market?
a) Yes b) no
4) if yes, how long you are trading in ?
a) Below one year b) 1-2 years c) 2- 3 years
5) If no, then why are you not trading in commodity market?
a) No proper information b) being risky c) not interested d) any other
6) Your opinion about commodity market
a) Risky b) less risky c) high risky
7) From whom you will get investment advice
a) Friends b) family c) consultant d) others
8) You prefer which type of investment
a) Long term b) short term c) medium term

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9) Which commodity has more value/ power?
a) Gold b) copper c) silver d) nickel
10) Why commodity prices are fluctuating
a) Government conditions b) supply of commodity
c) Demand of product d) all of the above
11) Is one commodity fluctuation affects other one
a) Yes b) no
12) In whole commodities which one you prefer more to trade
a) Gold b) silver c) nickel d) copper
13) Why crude oil prices fluctuates very often
a) Tax problem b) government policies c) demand for oil d)all of the above
14) Up to now how much profits/losses you gain
A) High b) medium c) low d) very low
15) Is there any common phenomenon is there between all commodities to fluctuations
a) Price changes b) demand of products c) market conditions d) supply is more
16) Many are prefer gold is there any reason
a) It is precious metal b)cost is high c)supply is high d) low demand
17) Main factor which influences gold prices
a) Inflation b) interest rates c) global crisis d) value of us dollar

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18) Commodity market is controlled by
a) SEBI b) forward market commission
19) What made consumers to trade in commodity market
a) Profit b) speculation c) less risky d) any others
20) Tell me your opinion about commodity market ___________

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DATA ANALYSIS & INTERPRETATION
Table.4.1
S. No Particulars
Percentage
Government
Employee
Private
Employee
Student Businessmen
1 Occupation 10 18 50 22

Interpretation
In the total respondents 50% major share is occupied by students, followed by22%
businessmen, 18%private employee and 10%government employee by this we can
understand that student’s awareness about the commodity market is very high.
10%
18%
50%
22%
Fig.4.1OCCUPATION
percentage governament
employee
percentage private
employee
percentage student
percentage businessmen

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Table.4.2
S. No Particulars
Percentage
Below
50000
50000 to
100000
100000 to
300000
Above
300000
1 Annual Income 20 21 46 13
Interpretation
46% of the respondents are in the annual income slab between 1,00,000 to 3,00,000
followed by21% respondents are in the annual income slab of 50,000 to 1,00,000 , 20%
of the respondents are in the annual income slab below 50,000 , 13% of the
respondents are in the annual income slab above 3,00,000. So the people of annual
income between 1,00,000 to 3,00,000 plays a major role in terms of awareness and
trading in commodity market.
20%
21%
46%
13%
Fig.4.2 ANNUAL INCOME
percentage below 50000 percentage 50000 to 100000
percentage 100000 to 300000 percentage above 300000

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Table.4.3
S. No
Particulars
Percentage
Yes No
1 Awareness
100 0
Interpretation
From the above table it reveals that 100% of the respondents are clearly known about
commodity markets.
100%
0%
Fig.4.3 AWARENESS
percentage YES percentage NO

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Table.4.4
S. No Particulars
Percentage
Below One Year 1 to 2 Years 2 to 3 Years
1 Term Of Trading 21 18 11

Interpretation
Here the total respondents are 50 members so it is equaled for 100%.from the above table
it reveals that 42% of the respondents are trading below 1 year, followed by 36 % trading
in between 1 to 2 years and 22% are trading between 2 to 3 years . so finally from this the
more number of respondents are trading below 1 year.

42%
36%
22%
Fig.4.4 TERM OF TRADING
percentage BELOW ONE YEAR percentage 1 TO 2 YEARS
percentage 2 TO 3 YEARS

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Table.4.5
S. No Particulars
Percentage
No Proper
Information
Being Risky
Not
Interested
Any Other
1
Reasons For Not
Trading
7 26 15 2

Interpretation
Here the total respondents are 50 members so it is equaled for 100%.From the above
table it reveals that 52% of the respondents are not trading because it is risky , followed
by 30% of the respondents are not interested, followed by 14% of the respondents have
no proper information and 4% of the respondents have other reasons.

14%
52%
30%
4%
Fig.4.5 REASONS FOR NOT TRADING
PERCENTAGE NO PROPER
INFORMATION
PERCENTAGE BEING RISKY
PERCENTAGE NOT
INTERESTED
PERCENTAGE ANY OTHER

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Table.4.6
S. No Particulars
Percentage
Risky Less Risky High Risky
1
Opinion About
Commodity
27 35 38

Interpretation
from the above table 38%of the respondents thinks that commodity market is highly risk,
followed by 35%of the respondents thinks that commodity market is low risky and 27%
of the respondents thinks that commodity market is normal risky.
27%
35%
38%
Fig.4.6 OPINION ABOUT COMMODITY
PERCENTAGE risky PERCENTAGE less risky PERCENTAGE high risky

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Table.4.7
S. No Particulars
Percentage
Friends Family Consultants Others
7
Investment
Advice
15 29 50 6
Interpretation
From the above table 50%of the respondent’s takes investment advice from consultants,
followed by 29%of the respondents takes it from family, 15%of the respondents takes it
from friends and 6%of the respondents takes it from others.
15%
29%
50%
6%
Fig.4.7 INVESTMENT ADVICE
PERCENTAGE friends PERCENTAGE family
PERCENTAGE consultants PERCENTAGE others

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Table.4.8
S. No Particulars
Percentage
Long Term Short Term Medium Term
1
Term Of
Investment
22 40 38
Interpretation
From the above table 40%of the respondents investments are long term, 38%of the
respondents investments are medium term and 22% of the respondents are short term.
22%
40%
38%
Fig.4.8 TERM OF INVESTMENT
PERCENTAGE long term PERCENTAGE short term
PERCENTAGE medium term

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Table.4.9
S. No Particulars
Percentage
Gold Copper Silver Nickel
9 Commodity Of More Value 36 31 31 2

Interpretation
From the above table we can know that 36% of the respondents prefer gold, followed by
31% of the respondents prefer silver, followed by 31% of the respondents prefer copper,
2% of the respondents prefer nickel.
36%
31%
31%
2%
Fig.4.9 COMMODITY OF MORE VALUE
PERCENTAGE gold PERCENTAGE copper
PERCENTAGE silver PERCENTAGE nickel

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Table.4.10
S. No Particulars
Percentage
Government
Conditions
Supply Of
Commodity
Demand Of
Product
All Of The
Above
1
Reasons For
Commodity Price
Fluctuations
4 33 5 58

Interpretation
From the above table we can know that 58% of the respondents think that commodity
prices fluctuate due to government conditions, supply of the commodity, demand of the
product, followed by 33% of the respondents thinks that it is due to supply of the
commodity. 5% of respondents think that it is due to demand of the product, 4% of the
respondent’s thinks that it is due to government conditions.
4%
33%
5%
58%
Fig.4.10 REASONS FOR COMMODITY PRICE
FLUCTUATIONS
PERCENTAGE governament condions
PERCENTAGE supply of commodity
PERCENTAGE demand of product
PERCENTAGE all of the above

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Table.4.11
S. No Particulars
Percentage
Yes No
1
Does One Commodity
Effects Other
39 61

Interpretation
From the above table we can know that 61% of the respondents think that one commodity
affects another and 39% of the respondents think that it doesn’t affect.
39%
61%
Fig.4.11 DOES ONE COMMODITY AFFECTS OTHER
PERCENTAGE yes PERCENTAGE no

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Table.4.12
S. No Particulars
Percentage
Gold Silver Nickel Copper
1 Commodity You Prefer 39 15 45 1
Interpretation
From the above table we can know that 45% of the respondents prefer nickel to trade,
followed by 39% of the respondents prefer gold ,followed by 15% of the respondents
prefer silver and remaining 1 % prefer copper.
39%
15%
45%
1%
Fig.4.12 commodity you prefer
PERCENTAGE gold PERCENTAGE silver
PERCENTAGE nickel PERCENTAGE copper

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Table.4.13
S. No Particulars
Percentage
tax problems
government
policies
demand for
oil
all of the
above
1 Fluctuations 2 53 18 27
Interpretation
From the above table we can know that 53 % of the respondents thinks that fluctuations
in crude oil prices is due to government policies, followed by 27% of respondents think
that it is due to all the factors, followed by 18% of respondents thinks that it is due to
demand for oil and remaining 2% of the respondents thinks that it is due to tax problems.
2%
53%
18%
27%
Fig.4.13 REASONS FOR FLUCTUATIONS IN CRUDE OIL
PERCENTAGE tax problems PERCENTAGE governament policies
PERCENTAGE demand for oil PERCENTAGE all the above

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Table.4.14
S. No Particulars
Percentage
High Medium Low Very Low
1 Level Of Profits 2 12 20 16

Interpretation
Here the total respondents are 50 members so it is equaled for 100%. From the above
table we can know that 40% of the repondents gains less profits,followed by 32% of the
respondents gains very low profits, followed by 24% of respondnts gains medium profits
and remaining 4% of the respondents gains high profits.
4%
24%
40%
32%
Fig.4.14 LEVEL OF PROFITS
PERCENTAGE high
PERCENTAGE medium
PERCENTAGE low
PERCENTAGE very low

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Table.4.15
S. No Particulars
Percentage
Price
Changes
Demand Of
Products
Market
Condition
s
Supply Is
More
1
Common
Phenomenon For
All Fluctuations
8 36 52 4
Interpretation
From the above table we can know that 52% of the respondents thinks that common
phenomenon for all commodities to fluctuate is market conditions, followed by 36% of
the respondents thinks that it is due to demand of products, followed by 8% of the
respondents thinks that it is due to price changes, and remaining 4% of the respondents
thinks that it is more supply.
8%
36%
52%
4%
Fig.4.15 COMMON PHENOMENON FOR ALL
FLUCTUATIONS
PERCENTAGE price changes PERCENTAGE demand of products
PERCENTAGE market condions PERCENTAGE supply is more

38
Table 16

Interpretation
From the above table we can know that 58% of the respondents prefer gold due to its
cost, followed by 32% of the respondents thinks that it is due to precious nature,
followed by 6% of the respondents thinks that it is due to high supply and 4%of the
respondents thinks that it is due to low demand.

32%
58%
6% 4%
Fig.4.16 WHY YOU PREFER GOLD
PERCENTAGE it is precious metal PERCENTAGE cost is high
PERCENTAGE supply is high PERCENTAGE low demand
S. No Particulars
Percentage
It Is Precious Metal
Cost Is
High
Supply Is
High
Low
Demand
1 Why You Prefer Gold 32 58 6 4

39
Table.4.17

S. No Particulars
Percentage
Inflation
Interest
Rates
Global
Crisis
Value Of Us
Dollar
17 Factors Influencing Gold Prices 2 19 59 20

Interpretation
From the above table we can know that 59% of the respondents thinks that global crisis
affects gold prices, followed by 20% of the respondents thinks that it is due to value of
the dollar, followed by 19% of the respondents thinks that it is due to interest rates, 2% of
the respondents thinks that it is due to inflation.
2%
19%
59%
20%
Fig.4.17 FACTORS INFLUENCING GOLD PRICES
PERCENTAGE inﬂaon PERCENTAGE interest rates
PERCENTAGE global crisis PERCENTAGE value of us dollar

40
Table.4.18
S. No Particulars
Percentage

SEBI
Forward Market
Commission
1 Control Of Commodity Market 17 83
Interpretation
From the above table we can know that 83% of respondents thinks that commodity
market is controlled by forward market commission and remains 13% of respondents
thinks that it is controlled by SEBI.
17%
83%
Fig.4.18.CONTROL OF COMMODITY MARKET
PERCENTAGE sebi PERCENTAGE forward market commision

41
Table.4.19
S. No Particulars
Percentage
Profit Speculation less risky Any Others
1 Reasons For Trade 36 29 22 13
Interpretation
From the above table we can know that 36% of the respondents opines that profit made
consumers to trade in commodity market, followed by 29% of the respondents thinks that
it is due to speculation, followed by 22% of the respondents thinks that it is due to less
risky and remaining 13% of the respondents thinks that it is due to all of them.
36%
29%
22%
13%
Fig.4.19 REASONS FOR TRADE
PERCENTAGE PROFIT PERCENTAGE SPECULATION
PERCENTAGE LESS RISKY PERCENTAGE ANY OTHERS

43
FINDINGS
1. Risk taking capacity is high in this commodities market because fluctuations
are as compared to other markets.
2. More number of people following the advices of consultant’s i.e. 50% and
getting suggestions which commodity is profitable.
3. In the commodity market large amount of commodities can be purchased by
having limited resources to invest.
4. Person between ages 20-35 years are more active players in the commodities
trading.
5. The commodity futures markets are experiencing a good growth in the recent
years and also giving good results
6. People are interested to invest in long term as it has 40%, to earn high income
with facing less risk.
7. More perception has been seen that 38% of respondents are feeling that very
risky with their investment in the commodity market.
8. According to survey most of the respondents feels that commodity prices are
fluctuated by so many factors
9. Most of the investors who occupies a major share of 42% are trading below
one year
10. Students are mostly attracted to commodity markets as they occupies major
share of 50% in awareness about commodity market
11. More number of people nearly 52% of respondents do not trade in
commodity market due to its nature of risk
12. Most of the people says gold has more value of power/value
13. According to our survey most of the people prefer nickel to trade followed by
gold
14. Most of the people has opinion that common phenomenon for all commodities
fluctuate is market condition
15. More than half of the respondents prefer gold because of its cost

45
SUGGESTIONS
1. Especially in gold and silver they should invest a minimum lump-sum amount
which is not affordable to small investors so if minimum investment is reduced to
some extent that might help to more people invest in commodities.
2. As commodity market growing so all groups of people must be asked to invest in
commodity futures.
3. If the minimum investment is reduced, this might induce more people to invest in
commodity future.
4. One should take better position with the help of fundamental and technical
analysis and get good profits.
5. It is better to invest in long term than in the short term, because in long term the
profits are high.
6. Take the suggestions from your source while investing to get better investment
advices.
7. In this commodity market the risk taking capacity is high so check again while
making investment in it.
8. High returns will come in commodities market so invest in this market.
9. Take medium risk while investing in this commodity market.
10. All the people who are investing in bullion market it is better to invest in energy
also, why because it is the emerging area in commodity market.

47
CONCLUSION
This study concludes that more number of investors is satisfied with the service of India
commodity market and making their investment on them. Commodities market is a future
growing market so make your investment in this market.
India is one of the top producers of a large number of commodities and also has a long
history of trading in commodity and related derivatives. The market has made enormous
progress in terms of technology, transparency and trading activity. Interestingly this have
happen only after the government protection was removed from the number of
commodity and market forces were allowed to play their role.
Organization should have to improve the services to retain more number of investors.
Commodity market provides various opportunities to various participants to get benefits
as per their objectives.
Ø The “Holding Capacity” of participating traders is very strong.
Ø More investors are interested to invest in gold and nickel

49
FUTURE ENHANCEMENTS
The project has a very vast scope in future. This project can be implemented on data
analysis about fluctuations in commodity market in future and when requirement for the
same arises as it is very flexible in terms of expansion .this project can also be
implemented in stock market.
The following are the future scope for the project
Ø This project can be implemented on technical analysis of commodity market to
know about price fluctuations
Ø This project can be extended to hedging where with the help of this project
investor behavior about hedging the commodity can be seen
Ø This project will be seen as a great fortune for investors. If it is extended in
financial derivative and commodity market derivatives
Ø This project can be useful to eliminate minor factors that causes fluctuations in
get the major factor by doing survey in major trade areas
Ø This can be useful to know about major type of investment which get us profit in
future

51
RECOMMENDATIONS
1. I recommend investors to take the advice of the consultants to invest in more
profitable commodity.
2. I recommend investors to prefer long term of investment.
3. I recommend that investor should keenly observe present market conditions that
affect fluctuations in price.
4. Students can start investing in commodity market to bring awareness about
commodity market and can bring revolutionary change.
5. I recommend the investors to invest in nickel and silver to reduce their risk.

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