4.1.

3 Commodities allowed for futures trading in India

According to the Forward Market Commission (FMC), there are more than 25 exchanges
operating that provide futures trading in a wide range of commodities goods under eight
primary categories. 1.Vegetable oilseeds, oils and meals, 2. Pulses, 3. Cereals, 4. Spices, 5.
Metals 6. Energy products, 7. Fibers, 8. Others.

Factors to keep in mind while trading commodity futures in order to trade commodity futures,
participants must keep certain factors in mind. The following categories can be used to
categorise these factors.

Agricultural Commodities

Carryover stocks: After satisfying demand, there are leftover supplies from the previous year's
manufacturing.

Expected demand: During the last few years, the average level of consumption and exports has
been quite stable. Amount of cropland: Amount of land planted in the crop.

Production: Estimated yield based on acreage, weather conditions, insect infestation, and other
factors,

Imports and exports: Traders need to know the specifics of essential sources and destinations
of external trade for commodities that have a significant quantity of external commerce (either
imports or exports), such as edible oils and pulses. Furthermore, dealers must keep track on
agricultural conditions in their particular countries.

Government policies: any shift in government policy about agriculture.

Procurement: Government agencies' direct acquisition and storage in warehouses Changes in

tariffs and base prices for internationally traded items will have an immediate influence on
commodity prices.

Metals

Currency effects: long-term volatility's major cause.

Variation in supply and demand for risk capital: The majority of risk capital comes from
wellestablished sources such as debt and equity.
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