Commodity Market and Types

A commodity market is a market that trades in the primary economic sector rather than manufactured products. Soft commodities are agricultural products such as wheat, coffee, cocoa and sugar. Hard commodities are mined, such as gold and oil.

Types of Commodities

1) Agriculture Commodities
2) Non- Agriculture Commodities

Agriculture Commodities

Agriculture provides the principal means of livelihood for over 58.4% of India's population. It contributes approximately one-fifth of the total gross domestic product (GDP). Agriculture accounts for about 10 per cent of the total export earnings and provides raw material to a large number of industries. Being the third largest land mass in the world, it is number top producer of many agriculture commodities. And yet Indian agriculture has one of the lowest yields in most commodities, nearly 55.7% of area sown are dependent on rainfall. Clearly, while there are challenges, there are huge potentials as well.

Example - Soya Complex, Mustard seed, Crude Palm Oil, Castor Seed.

Non- Agriculture commodities

Non - Agricultural Commodities can include everything that is not agriculture, the derivative segment has evolved in Industrial Metals, Energy and Precious Metals.

India has huge deposits of natural resources in the form of minerals like copper, iron ore, bauxite, and gold. Even on demand front India is one the major consumer of industrial metals and largest consumer of Gold. India is one of the few high growth economies. With a growing focus on infrastructure the demand for these metals will continue to rise. India's energy consumption has been increasing at one of the fastest rates in the world due to population growth and economic development.

Example - Gold, Silver.

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