ENCOURAGING OUTCOMES

India's commodity and currency markets have seen a massive spurt in business since its inception owing to growing acceptance among participants

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Among various markets, commodity markets India are highly accessible due to the consumption of commodities such as dal, rice, oil, vegetables, fruits, cotton, and milk in our daily lives. Despite their integral role in our lives, not many are familiar with these markets.

The extent of most people's curiosity is limited to checking inflation data. India's commodity market is estimated to be worth nearly ₹100 lakh crore, indicating its large size. A 2019 report by the United Nations Conference on Trade & Development stated that 102 out of 189 countries and two-thirds of the emerging markets are dependent on commodities.

Tracking the development of commodity markets over the past 14 years by looking at changes over time could be an interesting exercise. This is particularly relevant as more new products are being launched to cater to the commodity markets.

Given the enormity of the commodity markets, we will take a simple approach of focussing on a few key aspects. To simplify, we will examine broad developments in the commodity markets over the past 14 years and give a brief overview of the currency market, which plays a crucial role in India's commodity markets.

BROAD DEVELOPMENTS

In India, commodity markets are divided into two categories. One is agri-commodities, which includes cash crops such as spices, cereals, pulses, oilseeds, rubber, fibres like cotton and jute, and dry fruits, among others. These agro-commodities make up about 12% of the total commodity trade. The other category of commodities is non-agri commodities, which includes crude oil, natural gas, gold, copper, and silver.