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Local factors hold key

Monday, September 3, 2007

Despite global reference, local supply and demand determine the prices of agri and non-agri commodities.

An NCDEX study indicates that commodities such as base metals and energy also move according to their demand and supply in local markets, irrespective of their movements in the global markets.

In short, the wholesale commodities prices in India are not dependent on international movement.

The two different periods, January 2007 to July 2007 and July 2006 to July 2007, studied by the NCDEX indicate that all agricultural and non-agricultural commodities prices in the domestic wholesale markets did not go along with the movement in global markets.

Lead prices in London moved 79.8 per cent up and 191.7 per cent up for the 7-month and 12-month periods as against 36.3 per cent and 72.3 per cent gains in the domestic market.

Copper for the 7-month and 12-month periods surged 19.5 per cent and 3.3 per cent in London in comparison to 3.3 per cent and 37 per cent in the domestic non-ferrous metals markets.

Tin perked up 32.4 per cent and 76.3 per cent in London in comparison with its marginal advance of 2.9 per cent and 6.5 per cent in the domestic market.

Nickel continued to gain in the domestic market by 17.1 per cent in the 7-month period, while in London it declined 2.9 per cent.

For the one-year period, nickel gained 72.9 per cent in the domestic market because of additional demand from the stainless steel producers, while it gained only 27.6 per cent in London.

The price of zinc moved down by 19.8 per cent till December, but gained 6.8 per cent till July 2007 from its level in July 2006. But the metal continued its southward movement in domestic markets between the two periods to settle at 23.7 per cent and 3.2 per cent lower.

In agricultural commodities, maize prices have gone up in both the periods in the domestic market, while they have fallen in the global markets.

Coffee, barley and sugar have witnessed fall in prices in India, but global prices have gone up.

Posted by FR at 9:15 AM  

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Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it.& take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations given in this blog.