A

Project Report On

“A Study of Pandemic Impact of Selective Commodities on Commodity Market”

For Submitted By

Pranav Ambadas Gardas

Under the Guidance of Prof. Shekhar Chavan Submitted To

Savitribai Phule Pune University

In the partial fulfilment of the requirement for the award of Master’s

in Business Administration (MBA)

Through

JSPM Narhe Technical Campus

Rajashree Shahu Institute of Technology and Research

Batch 2020-22

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2
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 DECLARATION

I the undersigned, hereby declare that the Project Report entitled “A Study of Pandemic Impact of
Selective Commodities on Commodity Market” is written and submitted by me to the Pune
University in partial fulfilment of the requirements for the award of degree of Mater of Business
Administration under the guidance of Prof PRIYANKA SHINDE. It is my original work and
conclusions there in are based on the material collected by me.

Place: PUNE
Student Signature
Date: PRANAV AMBADAS GARDAS

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 ACKNOWLEDGEMENT

I would like to express my deepest sense of gratitude and sincere thanks to Dr. Sumant
Choudhary, Director, JSPM NTC, Pune who have helped us in completing this task. I express
sincere thanks to our guide Prof. PRIYANKA SHINDE who has given their valuable
suggestions, excellent guidance, continuous encouragement and taken keen interest in the
completion of this work. Their kind help and constant inspiration will even help us in the future.

I would thank A.B. INVESTMENT to grant us the project and also for co-operation and
encouragement for collecting the information and preparation of project report.
I would also like to thank our Dean MBA, Dr. R K Singh for opening doors of the
department towards the realization of the project report. I would also like to thank entire faculty
of our department for their co-operation and support.

Place: PUNE
Student Signature
Date: PRANAV AMBADAS GARDAS

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 Executive Summary

The research is all about the effect of covid-19 pandemic on the commodity market. There
aretwo large commodity market in India which Multi Commodity Exchange (MCX), and
National Commodity Derivative Exchange (NCDEX). In the MCX there are mostly metal
andenergy commodities are traded and in NCDEX mostly agricultural products are traded.

SEBI is the regulatory body of commodity markets. Before 24 September 2015 the MCX
isregulated by Forward Market Commission (FMC) from this date FMC merge in SEBI.

On 23rd March 2020 Prime Minister of India Shri Narendra Modi Announced completes
lockdown because of Covid-19. Analyse the effect of covid-19 pandemic commodity market5
commodities are selected which are:

• Crude Oil

• Gold

• Natural Gas

• Chana

• Cotton

In the covid-19 pandemic world’s economy gets affected so many developed countries
also faced bad time. Indian commodity market also get affected by covid-19 pandemic
for that 5 years of data of every commodity are taken for research and analyse how
commodity work inthe covid-19 pandemic situation.

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 INDEX

CHAPTER PAGE
CONTENT
NO. NO.

CH. 1 INTRODUCTION 6

CH. 2 ORGANIZATION PROFILE 11

CH. 3 RESEARCH METHODOLOGY 16

CH. 4 DATA ANALYSIS AND INTERPRETATION 36

CH. 5 FINDING SUGGESTIONS AND CONCLUSION 69

CH. 6 BIBLIOGRAPHY 75

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CHAPTER-I
Introduction

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 Introduction

India is among the top-5 producers of most of the commodities, in addition to being a
majorconsumer of bullion and energy products, which needs use of futures and
derivatives. Also India has big history of 145 years in the commodity market. In 1975the
India’s first commodity market get starts by names of Bombay Cotton Traders
Association the name it told that it started trading on cotton commodity.

After that so many regional commodity markets get started. In the starting ear
ofcommodity market in India only agricultural commodities get trade.

India has total six commodity market but Multi Commodity Exchange (MCX) and
National Commodity and Derivatives (NCDEX) are most traded commodity market in
India which are regulated by Security Exchange Board of India (SEBI) which establish in
12 April 1992 by the Government of India to secure the money of investors who invest
their money in Indian market. Before SEBI the regulatory body of MCX is Forward
Markets Commission (FCM) which gets merge in SEBI in the 28th September 2015.

In Multi Commodity Market (MCX) is the India’s largest commodity market. It is

establishedin 2003. From 28 September 2015, MCX is being regulated by the Securities
and Exchange Board of India (SEBI).
Earlier MCX was regulated by the Forward Markets Commission (FMC), which got
merged with the SEBI on 28 September 2015.
In MCX mostly nonagricultural commodity is traded like gold, silver, Aluminium,
Copper, Lead, Nickel, Zinc, Crude Oil, Natural Gas, Gasoline, Coal and some
agricultural commodities are also traded which are Cardamom, Cotton, Crude Palm Oil,
Kapas, Mentha Oil, Castor seed, RBD Palmolien, Black Pepper, Indore, Hyderabad,
Jaipur

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 National Commodity and Derivative Exchange is the largest agri-commodity market. It
is a public limited company under the law of Company’s Act 2003. NCDEX has offices
in Mumbai, Delhi, Ahmedabad, and Kolkata. NCDEX facilitates deliveries of
commodities through a network of over 594 accredited warehouses through eight
warehouse service providers Barley, Chana, Maize kharif/south, Maize rabi, Wheat,
Moong, Paddy (basmati), Kappa’s, Cotton, Guar seed, Guar gum, Castor seed, Cotton
seed oil cake, Soybean, Refined soy oil, Mustard seed, Crude palm oil, Sugar, Pepper,
Turmeric, Jeera, Coriander, etc. are things which are traded in futures and options in the
NCDEX.

In India on 30th January 2020 1st case of covid-19 case was found in Kerala the in the
month of 23rd March 2020 the Indian Government decide to shutdown the economy
because of covid-19 pandemic.

Then we see big fall in the Indian markets. Commodity market also got big effect of
covid-19 pandemic some commodities prices are goes down, some commodities goes in
huge in high and some commodity got no effect.

For research we have take some commodities which are:

• Crude Oil
• Natural Gas
• Gold
• Chana
• Cotton

A researcher takes the data from 1st January 2016 to 30th August 2020 for the research
and studies the prices in the year wise and analyse the prices of the selected commodity.

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 CHAPTER II
Company Profile

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 2.1 AB INVESTMENT SERVICES

AB Investment offers diverse investment sectors and lists service providers who
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charges are derived from them. These service providers are market leaders and help our users to
invest their money and grow their investment.We provide detailed information regarding the
investment sectors right from its basics to the market scenario offering our users a brief idea
about the sectors. The information provided on our website has been validated from trusted
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for the sole purpose of giving individuals an overview of the returns provided by the particular
sector. Financial calculations produced are based on the market returns and are calculated by
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customers should be mindful of the market risks and should always refer to the terms and
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2.2 SERVICE PROVIDE

We provide quality service and support

Mutual Fund
1. Investing in Diversified Holdings.
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1. Higher Liquidity.
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Bank
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2.3 DISCLAIMER

The investment sectors displayed on the AB Investments Website have been listed in all fairness,
after considering and determining various factors, including, but not limited to,
quantitativemeasures and qualitative assessments, and to the best of its ability, by AB Investment
and all its members, employees and any relevant person associated with AB Investment.

Any sort of graphical representations, recommendations, feedback and reviews, provided

on the Website, are in no way, either a guarantee for the performance of the funds or an
assessment of the fund’s, or the fund’s underlying securities’ creditworthiness.
Investments in different sectors are subject to market risks. Please read all the scheme(s) related
information and any other related documents before making an investment. Past performance of
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investment requirements before choosing a sector, or designing a portfolio that suits your needs.
AB Investment Services makes no warranties or representations, express or implied, on products
offered through the platform

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2.4 GENERAL TERMS AND CONDITIONS

Subject to the foregoing, these General Terms and Conditions (“T&C”)govern your access and
use of the Platform for general browsing or any other services available on the Platform.

By accessing or using any part of the Platform, you agree to be bound by these terms and
conditions. If you do not agree to all the terms and conditions, then you may not access the
platform or use any service provided by AB Investment
The words “You” and “Your” refer to the person(s) who use and avail the Services of AB
Investment through the Platform and shall include both singular and plural. The Services provided
herein is only for the Indian citizens and tax resident of India.

General Terms and Conditions form a legal and binding agreement between the you and AB
Investment and is made pursuant to the terms of the Information Technology Act, 2000.

Eligibility

You represent and warrant that you

a) Are at least 18 years old. In the event you are under the age of 18 years, you represent and
warrant that you have the requisite consent from your legal guardians and are availing the services
under their supervision;
b) Are competent to form a binding contract under the Indian Contract Act, 1872;
c) Have not previously been suspended or removed from using AB Investment Services and/or
the Platform or any part thereof.

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2.5 OUR CLIENTS

1 Ganesh developers
1. Chaitanya pvt ltd
2. SB Furniture

2.6 AB INVESTMENT GROWTH

Invested Value: 60 to 70 Lakh

Customers: 120+
Average Return: 30.11%+

2.7 INVESTMENT FOUNDERS

Founder

Amit Bhavekar

Industries

Financial Services

Company size

11-20employee

Headquarters

Pune, Maharashtra

Company Stage

Unfunded

Type

Partnership Founded

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 CHAPTER-III
Conceptual Background

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 Commodity Market

A commodity market is a market that trades in the primary economic sector rather
than manufactured products, such as cocoa, fruit and sugar.

Hard commodities are mined, such as gold and oil.

Futures contracts are the oldest way of investing in commodities. Futures are
secured by physical assets. Commodity markets can include physical trading and
derivatives trading using spot prices, forwards, futures, and options on futures.

Farmers have used a simple form of derivative trading in the commodity market for
centuries for price risk management.

A financial derivative is a financial instrument whose value is derived from a commodity

termed an underlined.

Derivatives are either exchange-traded or over-the-counter. An increasing number of

derivatives are traded via clearing houses some with central counterparty clearing,
which provide clearing and settlement services on a futures exchange, as well as off-
exchange in the OTC market.

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 Commodity Market

Hard Commodities Soft commodities

Agri Commdities :-
Bullions :- Gold , Silver Black Paper, Cotton,
Cardamom, Rubber

Base Metals :- Cereals and Pulses :-

Aluminium, Copper, Chana, Maize,Wheat,
Lead, Zinc Barley

Energy :- Crude Oil,

Natural Gas

History of Commodity Market

Commodity-based money and commodity markets in a crude early form are
believed to have originated in Sumer between 4500 BC and 4000 BC. Sumerians first
used clay tokenssealed in a clay vessel, then clay writing tablets to represent the
amount—for example, the number of goats, to be delivered. These promises of time and
date of delivery resemble futures contract.

The Amsterdam Stock Exchange, often cited as the first stock exchange, originated as a
market for the exchange of commodities. Early trading on the Amsterdam Stock
Exchange often involved the use of very sophisticated contracts, including short sales,
forward contracts,and options. "Trading took place at the Amsterdam Bourse, an open
aired venue, which was created as a commodity exchange in 1530 and rebuilt in 1608.
Commodity exchanges themselves were a relatively recent invention, existing in only a
handful of cities."

In 1864, in the United States, wheat, corn, cattle, and pigs were widely traded using
standard instruments on the Chicago Board of Trade (CBOT), the world's oldest futures
and options exchange. Other food commodities were added to the Commodity Exchange
Act and traded through CBOT in the 1930s and 1940s, expanding the list from grains to
include rice, mill feeds, butter, eggs, Irish potatoes and soybeans.
Successful commodity markets require broad

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consensus on product variations to make each commodity acceptable for trading, such
as thepurity of gold in bullion. Classical civilizations built complex global markets
trading gold orsilver for spices, cloth, wood and weapons, most of which had standards
of quality and timeliness.

Through the 19th century "the exchanges became effective spokesmen for, and
innovators of,improvements in transportation, warehousing, and financing, which
paved the way to expanded interstate and international trade."

History of Commodity Market in India

Commodity trading in India has a long history. In fact, commodity trading in

Indiastarted much before it started in many other countries. However, years of
foreign rule, droughts and periods of scarcity and government policies caused the
commodity trading inIndia to diminish.

The regulatory body was erstwhile Forward Markets Commission (FMC) which was set
up in1953. As of September 2015 FMC was merged with the Securities and Exchange
Board of India, SEBI. After this merger SEBI has ordered to exit many commodity
exchanges.

Commodities Derivatives in India

Year Commodities Market

1875 The first commodity feature exchange was organized namely, Bombay
Cotton Traders Association.
1952 Based on the recommendations of Shroff Committee, Forward Contract
Regulation Act was enacted.
1955 Commencement of future trading in cotton at East India Cotton Association,
Mumbai.
1956 Trading on Castor Seed commenced at Mumbai.
Trading on Turmeric commenced at Sangli.
1958 Futures trade on Jute was started at Calcutta.
1960 Futures trade on Pepper was started at Kochi.
1966 Futures trade on Cotton and many other commodities was suspended.
Dantwala Committee submitted its report. It recommended commencing
futures trade in several commodities.

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 1979 Khusro Committee submitted its report.
1994 Kabra Committee submitted its report.
1997 International futures contract on Black Pepper was permitted.
1998 Hedging in offshore exchange for actual users of non-oil commodities was
permitted.
1999 Futures trade in Edible Oil block and Coffee was permitted.
International futures contact in Castor Oil was permitted.
2001 Hedging in Petro-products in offshore exchanges was permitted.
Futures Trading in Sugar and Tea was permitted.

Exchange and Commodities Contacts

Exchanges Commodities Contacts

The East India Cotton Association, Mumbai. Cotton
The Ahmedabad Cotton Merchants Association, Ahmedabad. Cotton
The Central Gujarat Cotton Association, Vadodara. Cotton
The South India Cotton Association, Coimbatore. Cotton
The East India jute and Hessian Exchange Ltd., Calcutta. Jute, Jute Good, Hessian,
Sacking
The Ahmemdabad Commodity Exchange ltd., Ahmedabad. Castor Seed
The Rajkot Seeds Oil and Bullion Marchant Association, Castor Seed
Rajkot.
The Spices and Oilseeds Exchangr Ltd., Sangli. Turmeric
The Indian Pepper and Spices Trade Association, Kochi. Pepper Domestic and
International
Coffee Futures Exchange of India Ltd., Bangalore. Coffee
The Meerut Agrocommodity Exchange Company Ltd., Gur
Meerut.
Vijai Beopar Chamber Ltd., Muzffarnagar. Gur
The Rajadhani Oil and Oilseeds Exchange Ltd., Delhi. Gur
Bhatinda Om and Oil Exchange Ltd., Bhatinda. Gur
The Chamber of Commerce, Hapur. Gur and Potato
The First Commodity Exchange of India, Kochi. Copra, Coconut Oil and Oil
Cake
The Bombay Commodity Exchange Ltd., Mumbai. Castor Oil, RBN Palmolein,
Groundnut Oil Cake, Castor
Seeds

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The Kanpur Commodity Exchange Ltd. Mustard Seed Oil and Oil
Cake.
National Board of Trade, Indore. Soya Bean, Soya Bean Oil,
Soy Meal, Mustard Seed its
Oil and Cake
The Reshav Commodity Exchange ltd., Delhi. Potato

Securities and Exchange Board of India (SEBI)

SEBI is essentially a statutory body of the Indian Government that was

established onthe 12th of April in 1992. It was introduced to promote transparency in
the Indian investmentmarket. Besides its headquarters in Mumbai, the establishment
has several regional offices across the country including, New Delhi, Ahmedabad,
Kolkata and Chennai.

It is entrusted with the task to regulate the functioning of the Indian capital market. The
regulatory body lays focus on monitoring and regulating the securities market in India
to safeguard the interest of investors and aims to inculcate a safe investment
environment byimplementing several rules and regulations as well as by formulating
investment-related guidelines.

Structural Set Up of SEBI

SEBI follows a corporate structure. It has a Board of Directors, Senior

Management,Department heads and several crucial departments.

To be precise, it comprises of over 20 departments, all of which are supervised by

theirrespective department heads, who in turn are administered by a hierarchy in
general.

The SEBI’s hierarchical structure comprises of the following 9 Designated Officers:

The Chairman – Nominated by the Union Government of India.

• Two Members belonging to the Union Finance Ministry of India.
• One Member belonging to the Reserve Bank of India.
Other Five Members – Nominated by the Union Government of India

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The below-mentioned list highlights some of the most important departments of SEBI

 The Information Technology Department.

 The Foreign Portfolio Investors and Custodians.

 Office of International Affairs.

 National Institute of Securities Market.

 Investment Management Department.

 Commodity and Derivative Market Regulation Department.

 Human Resource Department.

Besides these, other crucial departments take care of legal, financial and
enforcement- relatedaffairs.

Functions of SEBI

Being a regulatory body, SEBI India has several powers to perform vital functions.
The SEBI Act of 1992 carries a list of such powers vested in the regulatory body.

The functions of SEBI make it an issuer of securities, protector of investors and traders
and afinancial mediator.

• To protect the interests of Indian investors in the securities market.

• To promote the development and hassle-free functioning of the securities market.
• To regulate the business operations of the securities market.
• To serve as a platform for portfolio managers, bankers, stockbrokers, investment
advisers, merchant bankers, registrars, share transfer agents and other people.
• To regulate the tasks entrusted on depositors, credit rating agencies, custodians of
securities, foreign portfolio investors and other participants.
• To educate investors about securities markets and their intermediaries.
• To prohibit fraudulent and unfair trade practices within the securities market and
related to it.
• To monitor company take-overs and acquisition of shares.

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Commodity Trading in India

Commodity trading in India has a long history. In fact, commodity trading in Indiastarted
much before it started in many other countries. However, years of foreign rule, droughts
and periods of scarcity and government policies caused the commodity trading inIndia to
diminish.
Commodity trading was restarted in India recently. In 2016, apart from numerous regionalexchanges,
India had six national commodity exchanges namely:

• Multi Commodity Exchange (MCX)

• National Commodity and Derivatives Exchange (NCDEX)
• Indian Commodity Exchange (ICEX)
• National Multi Commodity Exchange (NMCE)
• ACE Derivatives Exchange (ACE)
• Universal Commodity Exchange(UCX)

In 2018 both National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) launchedtrading
in commodities.

Multi Commodity Exchange (MCX)

Multi Commodity Exchange of India Ltd (MCX) is an independent commodity exchange

based in India. It was established in 2003 and is based in Mumbai. It is India'slargest
commodity derivatives exchange.
The average daily turnover of commodity futures contracts increased by 26% to Rs.
32,424Crduring FY 2019-20, as against Rs. 25,648Cr in FY 2018-19.
The total turnover of commodity futures traded on your Exchange stood at Rs.
83.98lakh Cr in FY 2019-20. MCX offers options trading in gold and futures trading
innonferrous metals, bullion, energy, and a number of agricultural commodities.

From 28 September 2015, MCX is being regulated by the Securities and Exchange
Board ofIndia (SEBI). Earlier MCX was regulated by the Forward Markets
Commission (FMC), which got merged with the SEBI on 28 September 2015. SEBI
issued operational guidelinesfor participation of Mutual Funds and Portfolio Managers
in commodity derivatives in May 2019 and subsequently, approved few custodial
service providers as custodians in the commodity space

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Mr Padala Subbi Reddy (Mr P S Reddy) was appointed as MD & CEO of the Company for a
period of five w.e.f. May 10, 2019. Prior to this Mr Reddy worked as managing director and
CEO of Central Depository Services (CDSL).

Commodities Traded Include

▪ Metal :- Aluminium, Copper, Lead, Nickel, Zinc

▪ Bullion :- Gold, Gold Mini, Gold Guinea, Gold Petal, Gold Petal, Gold Global, Silver,
Silver Mini, Silver Micro, Silver 1000.

▪ Agro Commodities :- Cardamom, Cotton, Crude Palm Oil, Kapas, Mentha Oil,
Castor seed, RBD Palmolien, Black Pepper.

▪ Energy :- Crude Oil, Natural Gas, Gasoline, Coal.

Paving the way for introduction of Options with 'commodities' as underlying, the
Governmentof India issued a notification on October 18, 2019, which widens the scope of
commodity derivatives traded in recognized exchanges. Following this, SEBI permitted
stock exchanges to launch 'Option in goods' in their commodity derivatives segment, in
addition to existing 'options on commodity futures'. MCX has launched Gold Mini Options
with Gold Mini (100 grams) bar as the underlying, and plans to launch Silver Mini 5 Kg
'option in goods' contract soon.

National Commodity and Derivatives Exchange (NCDEX)

National Commodity & Derivatives Exchange Limited (NCDEX) is an online

commodity exchange based in India. It has an independent board of directors and
provides a commodity exchange platform for market participants to trade in commodity
derivatives.

It is a public limited company, incorporated on 23 April 2003 under the Companies

Act,1956 and obtained its Certificate for Commencement of Business on 9 May
2003. It commenced operations on 15 December 2003
As of 31 July 2013, NCDEX has 848 registered members and client base of about 20
Lakhsand offers trading on more than 49,000 terminals across 1,000 centres in India. It
facilitatesdeliveries of commodities through a network of over 594 accredited warehouses
through eight warehouse service providers

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 with holding capacity of around 1.5 million tonnes and offers average deliveries of 1 lakh
MT at every contract expiry. NCDEX has offices in Mumbai, Delhi, Ahmedabad, Indore,
Hyderabad, Jaipur, and Kolkata.

Commodities Traded Include

 Cereals and pulses :- Barley, Chana, Maize kharif/south, Maize rabi, Wheat, Moong, Paddy
(basmati).

 Fibres :- Kappa’s, Cotton.

 Gaur :- Guar seed, Guar gum.

 Oil and Oil seeds :- Castor seed, Cotton seed oil cake, Soybean, Refined soy oil,
Mustard seed, Crude palm oil.

 Soft :- Sugar.
 Spices :- Pepper, Turmeric, Jeera, Coriander.

Contract in Commodity Market

Futures contract

Futures contract (sometimes called futures) is a standardized legal agreement to buy orsell something at
a predetermined price at a specified time in the future, between parties not known to each other.

The asset transacted is usually a commodity or financial instrument.

Contracts are negotiated at futures exchanges, which act as a marketplace between buyers andsellers

The buyer of a contract is said to be the long position holder, and the selling party is said to
bethe short position holder.

As both parties risk their counter-party walking away if the price goes against them,
thecontract may involve both parties lodging a margin of the value of the contract with
a mutually trusted third party.

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For example, in gold futures trading, the margin varies between 2% and 20%
depending onthe volatility of the spot market.

However, futures contracts also offer opportunities for speculation in that a trader who
predicts that the price of an asset will move in a particular direction can contract to buy or
sellit in the future at a price which will yield a profit. In particular, if the speculator is able to
profit, then the underlying commodity that the speculator traded would have been saved
during a time of surplus and sold during a time of need, offering the consumers of the
commodity a more favourable distribution of commodity over time.

▪ Option Contracts
▪
An options contract is similar to a futures contract in that it is an agreement betweentwo parties
to buy or sell an asset at a predetermined future date for a specific price.

The key difference between options and futures is that, with an option, the buyer is notobliged
to exercise their agreement to buy or sell. It is an opportunity only, not an obligation—futures
are obligations. As with futures, options may be used to hedge or speculate on the price of the
underlying asset.

Call Option

A call option is a contract wherein the buyer is vested with the right to purchase the
underlying asset at a predetermined price within the stipulated expiration date. Theunderlying
real asset for call option amounts to bond, stock, or any other form of security.

A call option, often simply labelled a "call", is a contract, between the buyerand
the seller of the call option, to exchange a security at a set price.

(the strike price). The seller (or "writer") is obligated to sell the commodity
orfinancial instrument to the buyer if the buyer so decides.
The buyer pays a fee (called a premium) for this right. The term "call" comesfrom the fact
that the owner has the right to "call the stock away" from the seller.

o Strike Price – The price that has already been agreed upon.
o Exercise Date – The date on which the right can be realised.
o Premium – The fee charged for the right.

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 Put Option

In finance, a put or put option is a stock market instrument which gives the holder (i.e. the
purchaser of the put option) the right to sell an asset (the underlying), at a specified price (the
strike), by (or at) a specified date (the expiry or maturity) to the writer (i.e. seller) of the put.
The purchase of a put option is interpreted as a negative sentiment about the future value of the
underlying stock.
The term "put" comes from the fact that the owner has the right to "put up forsale" the stock
or index.

Put options are most commonly used in the stock market to protect against a fall in theprice of a
stock below a specified price.
If the price of the stock declines below the strike price, the holder of the put has the right, but
not the obligation, to sell the asset at the strike price, while the seller of theput has the
obligation to purchase the asset at the strike price if the owner uses the right to do so (the holder
is said to exercise the option). In this way the buyer of the put will receive at least the strike
price specified, even if the asset is currently worthless.

A put option buyer thinks the price of a stock will decrease.

Which they will never get back, unless it is sold before it expires.The buyer has the right to sell
the stock at the strike price.

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 Spot Markets

Spot markets are also referred to as ―physical markets‖ or ―cash markets‖ because tradesare
swapped for the asset effectively immediately.

While the official transfer of funds between the buyer and seller may take time, such as T+2 in
the stock market and in most currency transactions, both parties agree to the trade ―right now.‖

A non-spot, or futures transaction, is agreeing to a price now, but delivery and transfer of funds
will take place at a later date.

Futures trades in contracts that are about to expire are also sometimes called spot trades since
the expiring contract means that the buyer and seller will be exchanging cash for the underlying
asset immediately.

Spot prices is captured at the identified basis centres of a commodity, by getting price quotes
from the empanelled polling participants representing the value chain comprising various user
class viz. Auctioneers, traders, cold store owners, Farmer, Grader, Miller, Commission
agents,Wholesaler’s, Processors, Importers, Exporters etc.

The prices of the underlying commodity are polled and disseminated to the Market.

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 Participants of Commodity Market

Speculators are attracted to market volatility, which helps them earn a return — eitheron the
upside
the downside of a trade. However, because speculators invest funds in the market, usually for
the shorter term, the broader market benefits because their trading bringsgreater clarity to the
value of the underlying asset.

Imagine if the grain markets consisted only of the farmers on the one side and consumers
andagribusinesses on the other. Low-volume trading would beleaguer that market, and it would
not be hard to imagine a larger entity manipulating prices to its advantage. However, a
selfinterested speculator stepping in adds a little more grease to the wheels of trading becauseall
sides benefit in the longer run with a greater number of players.

▪
▪ Hedgers

Hedging originated in farming and the grains, evolving most famously from Chicago’s historic
markets, but it now extends to currencies, interest rates and stock indices. Hedgers are not out
to make a quick buck. They need to protect a position, by purchasing some insurance for an
underlying asset they currently own. Hedgers buy a futures contract tolock in a price as
protection.

Hedging is about taking an opposite position in the market, with the aim of protecting against
future volatility. For example, airlines turn to hedging to manage their biggest cost drain:
fuel.Airline stocks often gyrate with the speculative nature of oil markets. Low-cost airlines are
typically most active in hedging because they are highly exposed to the cost of fuel.

Fuel hedging is also common across the trucking and shipping sectors. Companies that deal in
gold, such as large jewellers, may also buy a futures contract to protect them against volatilityif
they have a big order on the books that involves a large supply of the precious metal.

Hedging is not foolproof, however, because hedgers may incur hedging costs and losses
whenthey bet the wrong way. In the long run, however, profit margins are better protected
when hedgers participate in effectual futures markets.

Differences between Hedging and Speculation

The difference between hedging and speculation can be drawn clearly on following
grounds:

 Hedging is the act of preventing an investment against unforeseen price changes. The
process, in which the speculators trade in an underlying asset of the high-risk element, in
order to earn profits, is known as speculation.
.
29
 Hedging is a means to control or eliments risk Conversely speculation depends on
risk, in the hope of making good returns.
 Hedgers are risk averse, who secure their investment through hedging. Speculators are
risk lovers, who take risks deliberately and play a critical role in providing liquidity in the
market.

▪ Arbitrageur
▪

An arbitrageur is a type of investor who attempts to profit from market inefficiencies.These

inefficiencies can relate to any aspect of the markets, whether it is price or dividends or
regulation. The most common form of arbitrage is price.

Arbitrageurs exploit price inefficiencies by making simultaneous trades that offset each
otherto capture risk-free profits. An arbitrageur would, for example, seek out price
discrepancies between stocks listed on more than one exchange by buying the undervalued
shares on one exchange while short selling the same number of overvalued shares on another
exchange, thus capturing risk-free profits as the prices on the two exchanges converge.

In some instances, they also seek to profit by arbitraging private information into profits.
Forexample, a takeover arbitrageur may use information about an impending takeover to buy
up a company's stock and profit from the subsequent price appreciation.

30
 Commodities select of Research

1. Crude Oil
2. Natural Gas
3. Gold
4. Chana
5. Cotton

31
 Crude Oil

• Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon

deposits in natural underground pools or reservoirs and remains liquid at atmospheric
pressure and temperature. Although it is often called "black gold," crude oil has a wide
ranging viscosity and can vary in colour to various shades of black and yellow depending on
its hydrocarbon composit though most crude oil is produced by a relatively small number
of companies and often located in remote locations far from the point of consumption,
trading in crude oil on a global basis has always been robust. Nearly 80% of international
crude oil is transported through waterways in large tankers and most of the rest by inland
pipelines

• The majority of oil reserves in the world is in the Middle East, at 48 per cent of the known
and identified reserves. This is followed by North America, Africa, Central and South
America, Eurasia, Asia and Oceania, and Europe.

• OPEC controls almost 40 per cent of the world's crude oil, accounts for about 75 per cent of
the worlds proven oil reserves, and exports 55 per cent of the oil traded internationally.

• In oil trading, risk management techniques are extremely important for the various
stakeholders and participants, such as producers, exporters, marketers, processors, and SMEs.
Modern techniques and strategies, including market-based risk management financial
instruments like Crude Oil Futures, offered on the MCX platform can improve efficiencies
and consolidate competitiveness through price risk management.

Factors Influencing the Market

• OPEC output or supply

• Changing scenarios in oil demand from emerging and developing countries
• US crude and products inventories
• Refinery Utilization rate
• Global geopolitics
• Speculative buying and selling
• Weather conditions

32
 Natural Gas

• Natural gas is a vital component of the world's energy supply. It is one of the cleanest, safest,
and the most useful of all energy sources. Given its growing resource base and relatively low
carbon emissions compared with other fossil fuels, natural gas is likely to play a greater role
in the world energy mix.
• As early as about 500 BC, the Chinese discovered the potential of natural gas seeping
through the earth’s surface. They used it to boil sea water, separating the salt and making it
drinkable. Around 1785, Britain became the first country to commercialize the use of natural
gas; natural gas produced from coal was used to light houses as well as streetlights.

• Without any effective transportation method, natural gas discovered before World War II
was usually just allowed to vent into the atmosphere, or burnt, when found alongside coal
and oil, or simply left in the ground when found alone. Once the transportation of natural
gas was possible, new uses were discovered. These included heating homes and operating
appliances, such as water heaters, ovens, and cook tops. Industry began to use natural gas in
manufacturing and processing plants, in boilers used to generating electricity.

• Given the volatility in international natural gas prices, risk management techniques are of
utmost importance for stakeholders of this commodity, particularly its users. Amidst
uncertainty, modern techniques and strategies, including market-based risk management
financial instruments like ‘Natural Gas Futures’, offered on the MCX platform can improve
efficiencies and consolidate competitiveness through price risk management.

Factors Influencing the Market

• International natural gas inventory data

• US weather conditions
• Price of crude oil
• Industrial and residential demand in the U.S.

33
 Gold

• Gold, the most sought-after of all precious metals, is acquired throughout the world for its
beauty, liquidity, investment qualities, and industrial properties. As an investment vehicle,
gold is typically viewed as a financial asset that maintains its
• Chana is usually suited to those areas having relatively cooler climatic conditions and a value
and purchasing power during inflationary periods.

• Gold has a long and fascinating usage history in a diverse range of industries and applications.
In each of the applications it is used, gold provides an outstanding performance due to its
unique properties of being one of the most malleable and ductile metals with high melting
point and easy recyclability. Gold is a material of choice in medicine and dentistry as it is
biocompatible. In recent years it has emerged
as a key nonmaterial. Global demand for gold is cantered on four primary categories:
jewellery, investment, central bank reserves, and technology.

• Risk management is of critical importance for gold value chain participants, such as mining
companies, processors, companies dealing in gold and gold products, jewellers, and even
governments which rely on the proceeds of bullion consumption and trade. Modern hedging
techniques and strategies, including market-based risk management financial instruments,
such as gold futures, can improve efficiencies and consolidate competitiveness.

Factors Influencing the Market

 Above-ground supply of gold from central bank sales, reclaimed scrap, and official gold
loans.
 Hedging interest of producers and miners.

 World macroeconomic factors, such as movement in the dollar and interest rate, and
economic events.

 In India, gold demand is also influenced by seasonality, that is, marriage and
harvesting.

34
 Chana

• Chickpea or Chana is a very important pulse crop that grows as a seed of a plant named
Cicer arietinum in the Leguminosae family. It contains 25% proteins, which is the maximum
provided by any pulse and 60% carbohydrates. It places third in the importance list of the
food legumes that are cultivated throughout the world.. Chana is used as an edible seed and is
also used for making flour throughout the globe. There are mainly two types of chickpea
produced i.e. Desi and Kabuli.

• low level of rainfall. It yields best when grown on sandy, loam soils having an appropriate
drainage system as this crop is very sensitive to the excess water availability and a lack of
such system can hamper the yield levels.

Chickpea is seeded in the months of September to November (Rabi Season) in India. The
maturity period of desi type chickpea is 95-105 days and of kabuli type chickpea is 100-110
days. Harvesting of the plant is done when its leaves start drying and shedding and can be
done directly or with the help of a harvester. In India, it isharvested in February, March and
April.

• India is the largest producer of chickpea followed by Pakistan, Turkey and Iran. India
produces around 6 to 8 million tonnes and contributes around 70% of the total world
production. Chickpea is the most largely produced pulse crop in India accounting to a share
of 40% of the total pulse production. India produces mostly the Desi type chickpeas.

The domestic demand of chickpea is so large that after it being the largest
producer of chana, India is also the largest importer of chana in the world. Over 4/5ths of the
chana produced in the country is used to produce Chana Dal and over 4/5ths of this Dal is
ground to make flour termed as Besan in India. The Indian imports figure around 3-4 lakh
tons i.e. 30% of the total world imports. The countries which exports chickpea to India are
Canada, Australia, Iran, Myanmar, Tanzania, Pakistan and Turkey. To fulfill the growing
protein requirement of vegetarian population of India, demand for Chana will be even higher
in the future.

o Factors Influencing the Market

 Rainfall level and level of moisture in the soil.

 Obstruction in the information movement.

 Crop situation in the countries from where India imports the crop.

 Prices of the other competitive pulses produced.

35
 Cotton

• The use of cotton for fabric is known to date to prehistoric times; fragments of cotton fabric
dated from 5000 BC have been excavated in Mexico and the Indus Valley Civilization. The
Indus cotton industry was well developed and some methods used in cotton spinning and
fabrication continued to be used until the industrialization of India. Between 2000 and 1000
BC cotton became widespread across much of India. For example, it has been found at the
site of Hallus in Karnataka dating from around 1000 BC.
• Cotton is essentially grown for its fibre, which is used the world-over to make textile.
Cotton fibre is one of the most important textile fibres, accounting for around 35% of the
world's total textile fibre used. Cotton's strength, absorbency, and capacity to be washed and
dyed also makes it adaptable to a considerable variety of textile products. Cotton seed is
crushed to make cottonseed cake, which is used in livestock feed; and cottonseed oil which
is the 5th major edible oil consumed in the world. Cotton is classified according to the
staple, grade, and character of each bale—staple refers to the fibre length; grade ranges from
coarse to premium and is a function of colour, brightness and purity; and character refers to
the fibre's strength and uniformity.
• The realities of the market call for efficient risk management techniques that are important
for stakeholders, such as producers, exporters, marketers, processors, and SMEs. When the
future is unknown, modern techniques and strategies, including market-based risk
management financial instruments like ‘Cotton Futures’, offered on the MCX platform can
improve efficiencies and consolidate competitiveness through price risk management
• .

Factors Influencing the Market

• The domestic demand supply scenario, inter-crop price parity, cost of production, and
international price situation are the major factors that influencing prices in the market.
• Weather, pests, diseases and other risk factors associated with agricultural crops also have a
bearing on cotton production.
• Government policies on import, export, and minimum support price are significant
influencers of cotton prices.
• Cotton yarn prices in different markets across the country show a high correlation of above
90% with India's raw cotton prices.

36
l

CHAPTER IV

Research Methodogoly

37
 Research Objective

The objectives of study are as follows:

 To study the commodity market.

 To study and analyze the trends in commodity market
 To understand the commodity market trading in Covid-19 pandemic condition.

The limitations of report:

 Internal information and confidential data not easily available.

 Trading figures are available from 1 Jan 2017 to 31 Dec 2021.

 Research is mostly depend secondary data.

 Even thought the prices of commodity is dependent on some technical and

 fundamental parameters and affected by various factors such as foreign flows, natural

 calamities, policies, etc

38
 Research Methodology

Research

Research is an integrated part of education. According to John best research is definedas ―A

systematic analysis and recording at controlled observation as that lead to generalization and
principle of theories resulting in product as control of many events that areof consequences‖.

Research methodology

Research methodology is a detailed process of arriving to dependable solution through planned and
systematic collection, analysis and data interpretation of data

Sources of Data

❖ Secondary Data

When researcher use data which are previously collected by some other researcher,
institutions, or agencies for their own purposes are called secondary data either from and
internal source of an organization, or from the published sources like reports and journals. The
purposes of the data may vary from that of the current study. Hence, few portion of this data
may be used for current researchproblem. It should be kept in mind that, secondary data needs
to be processed before applying in research, as the context of data may have changed and
modified as per their own purposes.

Research Period

The study was scheduled for a period of 5 years (01/01/2017 to 31/12/2021)

39
CHAPTER V

Data Analysis
&
Interpretation

40
 Historical Data of Commodities

Crude Oil

Year
Month 2021 2020 2019 2018 2017
Open Close Open Close Open Close Open Close Open Close
January 4,349 4,340 4,374 3,683 3,208 3,869 3,858 4,112 3,666 3,614
February 5,245 5,209 3,671 3,263 3,839 4,058 4,120 4,093 3,608 3,566
March 5,024 4,927 3,349 1,680 4,074 4,185 4,065 4,234 3,580 3,284
April 5,369 5,287 1,616 1,183 4,193 4,467 4,246 4,583 3,276 3,174
May 5,402 5,425 1,360 2,564 4,443 3,775 4,566 4,517 3,168 3,127
June 6,074 6,123 2,670 3,015 3,696 4,095 4,507 5,086 3,135 2,968
July 6,104 6,185 3,007 3,023 4,123 4,032 5,036 4,734 2,974 3,183
August 5,680 5,634 3,005 3,145 4,018 3,952 4,710 4,959 3,221 3,038
September 6,224 6,244 2,984 3008 3,962 3,880 4,941 5,335 3,018 3,373
October 6,985 7,054 2,931 3103 3,889 3,853 5,344 4,892 3,354 3,528
November 6,067 5,593 3,141 3267 3,861 3,980 4,860 3,576 3,536 3,687
December 6,515 6,423 3,589 3899 4,000 4,386 3,606 3,170 3,712 3,850

41
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 4349 5245 5024 5369 5402 6074 6104 5680 6224 6985 6067 6515
Close 4340 5209 4927 5287 5425 6123 6185 5634 6244 7054 5593 6423

Year 2021

India’s oil demand forecast by 135,000 b/d for 2021 – with downward adjustment of
175,000b/d for April, 760,000 b/d for May, 830,000 b/d for June and 360,000 b/d for July
– down from a forecast of 485,000 b/d made in February
However, once the lockdowns are lifted, Platts expects the pent-up demand to get
released, which in turn will act as a catalyst for economic growth and trigger a demand
uptick for oil &gas in the country. April demand has been down month-on-month, and
we expect another decline in May, but recovery in the second half of the year remains in
sight. Oil demand in H2-2021 is expected to be 650,000 b/d higher than the first half of
2021 (H1-2021), driven bya more broad-based pickup in economic activity amid
widening vaccination

42
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 4374 3671 3349 1616 1360 2670 3007 3005 2984 2931 3141 3589
Close 3683 3263 1680 1183 2564 3015 3023 3145 3008 3103 3267 3899

Year 2020

In the year 2020 there is huge fall in prices of crude oil because so many countries
announcedlockdown for covis-19 pandemic therefore the demand of crude is going
down and down, in end of March 2020 to till mid of April 2020 the prices of crude oil
because of corona virus pandemic. The opening price in March 2020 is Rs. 3,349 and
the closing price is Rs. 1,680 prices decreases by 48.51% its continuing downfall in April
opening price is Rs. 1,616 and closing is Rs. 1,183. In May 2020 the prices of crude oil
starts slowly gaining again.

43
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 3208 3839 4074 4193 4443 3696 4123 4018 3962 3889 3861 4000
Close 3869 4058 4185 4467 3775 4095 4032 3952 3880 3853 3980 4386

This year overall market seems very stable only in 2019. In this year small wave
lookin the graph. Opening price of the year is Rs.3,208 and Closing price of the year is
Rs. 4,386in 2019 prices of crude oil change by 36.72%. In this year of crude oil is looks
bullish trend years low price is Rs. 3,114 in the month of January and the highest price
of the year is Rs. 4,692 in month of April.

44
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 3858 4120 4065 4246 4566 4507 5036 4710 4941 5344 4860 3606
Close 4112 4093 4234 4583 4517 5086 4734 4959 5335 4892 3576 3170

In this year 2018 till June month commodity looks natural in nature from month
July, Aug and Sept prices are gaining in the market from Oct, Nov, and Dec prices
comes to 52 week low because some conflict between OPEC and America therefore it
directly impacton commodity market, from Oct to Dec prices fall by 68%. End of the
year is shows bad forthe crude oil.

45
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 3666 3608 3580 3276 3168 3135 2974 3221 3018 3354 3536 3712
Close 3614 3566 3284 3174 3127 2968 3183 3038 3373 3528 3687 3850

Year 2017

In year 2017 the graph shoes V shape recovery in the prise of commodity market from
May, Jun and Jul market goes down because OPAC countries made over production in
year 2016 therefore the demand remains same and production gets increased so that
there is fall in the prices. From Aug it starts going upward in Dec it reach at 52 weeks
high with price Rs.3,601.In yearend market prices gains their prices.

46
 .

Natural Gas

Year
Month 2021 2020 2019 2018 2017
Open Close Open Close Open Close Open Close Open Close
January 182.7 191.5 156 132.4 204.3 201.5 191.4 190.5 252.1 212.8
February 191.8 205.9 132.9 124.3 202.2 199.7 191.1 175.9 212.5 185
March 206.3 191.1 126.6 125.3 199 186.7 175.1 179.4 185.5 205.8
April 191.0 218.0 127.8 144.2 186.8 180.8 178.5 183.8 207.9 212.1
May 219.4 221.8 149 135.9 179.7 172.3 185 199.5 211.7 198.6
June 222.4 272.2 135.5 130.4 172.9 160.5 199.1 200.8 199.8 193.8
July 270.5 290.0 130.1 135.6 161.5 155.1 200 192.8 192.7 180
August 292.9 318.3 140.41 190.7 154.8 165.1 192.3 206.9 181.5 194.8
September 319.5 428.8 190.89 161.67 168.1 165.8 206.2 218 195.2 198.4
October 439.0 409.0 165.34 180.2 166 187 219.7 241.6 196.2 187.8
November 406.9 347.0 192.18 199.8 187.9 167.2 242 317.4 188.3 197.1
December 342.3 276.5 187.1 195.5 169.2 155.5 312 212.2 197.6 189.7

47
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 182.7 191.8 206.3 191.0 219.4 222.4 270.5 292.9 319.5 439.0 406.9 342.3
Close 191.5 205.9 191.1 218.0 221.8 272.2 290.0 318.3 428.8 409.0 347.0 276.5

Year 2021
Million Tones

Natural Gas consumption is forecast to reach 143.08 million tonnes (MT). India’s LNG
import stood at 33.68 bcm during FY20. According to the International Energy Agency
(IEA),consumption of natural gas in India is expected to grow by 25 billion cubic metres
(bcm), registering an average annual growth of 9% until 2024. As of June 31, 2021, Gas
Authority of India Ltd. (GAIL) had the largest share (57.56% or 18,834 kms) of the
country’s natural gas pipeline network (32,718 kms). Natural Gas consumption is
forecast to increase at a CAGR of 4.18% to 143.08 million tonnes by 2040 from 58.10
million tonnes in 2018.

he reserve will also help the country cope with demand spike and price rise in the event
ofpolitical unrest. Thus, this report helps in providing the complete dossier for business
case assessment for the EPC players, End users and building strategic reserves in India
by 2025

India is set to expand India’s natural gas grid to 34,500 kms by adding another 17,000
km gaspipeline. The regasification capacity of the existing 42 MMT per annum will be
expanded to 61 MMT per year by the year 2022.

48
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 156.0 132.9 126.6 127.8 149.0 135.5 130.1 140.4 190.9 165.4 192.1 187.1
Close 132.4 124.3 125.3 144.2 135.9 130.4 135.6 190.7 161.7 180.2 199.8 195.5

Year 2020

On 23 March 2020 our Prime Minister announced 21 days lockdown due to

corona virus at that time the price of natural gas in Indian market (MCX) is Rs.
123.70with volume 1,22,900. On the next day 24 March 2020 price is Rs. 125.40 is
increased by 1.6% on the endof the March month the price of natural gas is Rs. 131.11.
In the August prices of commodityrise by 40.63%.

49
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 204.3 202.2 199.0 186.8 179.7 172.9 161.5 154.8 168.1 166.0 187.9 169.2
Close 201.5 199.7 186.7 180.8 172.3 160.5 155.1 165.1 165.8 187.0 167.2 155.5

Year 2019

In this year market look decreasing. Starting of the year the prices of the natural
gas remains high in the whole year that is Rs. 204.3 since January to July market is
gradually decreasing to Rs. 155.1. August to October prices goes to up from Rs.
154.8 to Rs. 187 by20.64%, then again prices starts falling to Rs. 155.5 on December.

50
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 191.4 191.1 175.1 178.5 185.0 199.1 200.0 192.3 206.2 219.7 242.0 312.0
Close 190.5 175.9 179.4 183.8 199.5 200.8 192.8 206.9 218.0 241.6 317.4 212.2
Year 2018

This year is a good for natural gas because the prices of the natural gas is the prices
of the commodity goes increasing from January to November on 1st January the
price is Rs.
191.4 to 30th in month of November prices goes 4 years high of natural gas.
Novemberthe price is Rs. 317.4, price rise by 65.95% in 11 months. In December
prices drops by33.14% to Rs. 212.2 from Rs. 312.

51
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 252.1 212.5 185.5 207.9 211.7 199.8 192.7 181.5 195.2 196.2 188.3 197.6
Close 212.8 185.0 205.8 212.1 198.6 193.8 180.0 194.8 198.4 187.8 197.1 189.7

Year 2017

Indian Government cut down the prices of domestic natural gas after 6
years so that’s whymarket goes decreasing at the starting of the year. Whole
year market is natural by at the January the opening price is Rs. 252.1 to Rs.
212.8. Then the prices is remains constant between Rs. 180 to Rs. 200
throughout the year.

52
 • Gold

Year
Month 2021 2020 2019 2018 2017
Open Close Open Close Open Close Open Close Open Close
January 50,123 49,111 38,980 41,012 31,550 33,100 29,332 30,064 27,673 29,172
February 49,298 45,569 41,249 41,763 33,119 32,902 30,125 30,423 29,155 29,592
March 46,187 44,418 41,313 43,225 32,857 31,703 30,307 30,426 29,455 28,612
April 44,500 46,431 42,691 44,647 31,588 31,625 30,580 30,947 28,607 28,872
May 46,849 48,807 44,703 46,858 31,604 32,131 30,855 30,882 28,834 28,905
June 48,975 46,817 46,995 48,861 32,147 33,947 30,796 30,363 28,877 28,295
July 46,882 47,901 48,779 53,582 33,777 34,714 30,380 29,638 28,300 28,588
August 48,094 47,060 53,515 51,099 34,520 38,300 29,591 30,116 28,623 29,756
September 47,060 46,221 51,372 51,560 38,520 36,873 30,075 30,479 29,687 29,549
October 46,303 47,502 50,702 50,915 36,979 38,842 30,399 31,631 29,420 29,040
November 47,649 47,439 50,960 50,834 38,759 37,961 31,671 30,186 29,048 28,992
December 47,488 47,994 50,858 51,654 38,240 38,999 30,322 31,489 29,045 29,372

53
 YEAR 2021

Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 50123 49298 46187 44500 46849 48975 46882 48094 47060 46303 47649 47488
Close 49111 45569 44418 46431 48807 46817 47901 47060 46221 47502 47439 47994

14 January, 2021The COVID-19 pandemic raised uncertainty by compounding existing

risks and creating new ones. But by the end of last year, investors were optimistic that
the worst was over. Looking ahead, we believe that investors will likely see the low
interest rate environment as an opportunity to add risk assets in the hope that economic
recovery is on the immediate horizon, investors will likely also be navigating potential
portfolio risks including:.

In our outlook for gold, we believe investment demand will remain well supported while
goldconsumption should benefit from the nascent economic recovery, especially in
emerging markets. Gold also had one of the lowest drawdowns during the year, thus
helping investors limit losses and manage volatility risk in their portfolios

By early August, the LBMA Gold Price PM reached a historical high of US$2,067.15/oz
as well as record highs in all other major currencies While the gold price subsequently
consolidated below its intra-year high, it remained comfortably above US$1,850/oz for
mostof Q3 and Q4, finishing the year at US$1,887.60/oz.

54
 Year 2020

Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 38980 41249 41313 42691 44703 46995 48779 53515 51372 20702 50960 50858
Close 41012 41763 43225 44647 46858 48861 53582 51099 51560 50915 50834 51654

This year lockdown announced by the Government due increasing cases of

corona virus in 23rd March. In May, June, July there is tension between USA and
China and increasing patients of corona virus so prices of gold rich historical high to
Rs. 56,440. Fromcalculating January to August the prices of gold goes from Rs.38,980
to Rs. 51,099 that is 31.02%.

55
 YEAR 2019

Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 31550 33119 32857 31588 31604 32147 33777 34520 38520 36979 38759 38240
Close 33100 32902 31703 31625 31131 33947 34714 38300 36873 38842 37961 38999

Low demand of gold in the starting the year that’s why prices are decreasing in
February to April. In this year graph it looks like wave increasing then decreasing then
again increasing inthe month of April 20 here we found opening and closing rate is
almost same in the candle sticks pattern it called as Doji candle from this trend of
commodity gets change from this uptrend starts. From April to August the prices are
raising from Rs. 31,625 to Rs. 38,300 by 21.10%. September to December Prices are
moves from Rs.36000 to Rs. 39000.

56
 Year 2018

Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 29332 30125 30307 30580 30855 30796 30380 29591 30075 30399 31671 30322
Close 30064 30423 30426 30947 30882 30363 29638 30116 30479 31631 30186 31489

This whole year market looks very volatile S in January market Starts from Rs.
29,332 and inDecember Prices are Rs. 31,489 by the rate of 7.35%. The high price of
this year is Rs.
32,075 in the month of October the low of this year is Rs. 29,123 in the month of
January. Last three month of the year are looks very volatile because its shows very
high difference inbetween opening and closing.

57
 Year 2017

Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 27673 29155 29455 28607 28834 28877 28300 28623 29687 29420 29048 29045
Close 29172 29592 28612 28872 28905 28295 28588 29756 29549 29040 28992 29372

In this year the graph shows so many up and down in the prices of the gold in
the month of January and August there are difference of 4 to 5 percent between
opening and closing balance April to July market at its resistance price in September
to November pricescomes down to Rs. 28,992. In December prices hike by 1.31%.

58
  Chana

Year
Month 2021 2020 2019 2018 2017
Open Close Open Close Open Close Open Close Open Close
January 4,362 4,500 4,501 3,988 4,334 4,210 4,015 3,846
February 4,525 4,749 4,021 3,971 4,219 4,073 3,850 3,668
March 4,751 5,039 3,970 4,136 4,070 4,345 3,680 3,769
-April 5,070 5,337 4,137 4,173 4,370 4,327 3,765 3,480
May 5,330 5,299 4,210 4,104 4,320 4,611 3,502 3,508
June 5,304 4,967 4,120 4,204 4,599 4,222 3,520 3,470
July 4,995 5,140 4,199 4,098 4,225 4,283 3,470 4,220 5,302 4,933
August 5,109 5,152 4,131 4,903 4,290 4,016 4,233 3,865 4,953 6,180
September 5,140 5,207 4,899 5,420 4,005 4,256 3,817 4,094 6,170 5,658
October 5,191 4,967 5,525 5,210 4,260 4,455 4,121 4,011 5,675 4,933
November 4,969 4,850 5,314 5,180 4,464 4,387 3,995 4,706 4,960 4,732
December 4,860 4,818 5,075 4,900 4,370 4,495 4,733 4,350 4,695 4,015

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Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 4362 4525 4751 5070 5330 5304 4995 5109 5140 5191 4969 4860
Close 4500 4749 5039 5337 5299 4967 5140 5152 5207 4967 4850 4818

Chana reversed from its downward journey April onwards. Improving demand
from millers and retailers were seen after the unlocking phase started. e
domestic market participants remain optimistic about trading activity to
improve during the first quarter of 2021 because the Ramazan season begins in
April this year and usually purchases of pulses increase duringthis period

Chana reversed from its downward journey April onwards. Improving demand
from millersand retailers were seen after the unlocking phase started.

The Government had increased the Minimum Support Price (MSP) of Bengal
gram by 4.62 percent to ₹ 5,100 per quintal for Rabi marketing year (MY) 2021-
22 compared to ₹ 4,875 in2020-21 Bengal gram prices will be range-bound with
an upward movement in immediate/short term due to lower supplies in mandis
against robust demand for chana daland besan ahead of festivalsCurrently,
prices of Bengal gram have been hovering around MSP, as NAFED continues to
sell Chana stock and therefore the supply side seems balanced for the moment

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Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 4501 4021 3970 4137 4210 4120 4199 4131 4899 5525 5314 5075
Close 3988 3971 4136 4173 4104 4204 4098 4903 5420 5210 5180 4900

Year 2020

In year 2020 lockdown announced by our honourable PM Modi because of corona

virus so that’s why all major industries are closedown. Chana is mainly agricultural
productso not get effected by lock down. The current GDP result also says that there
are hike in the production of agri-products its rise by almost 3% by last quarter
results.

The commodity market of chana is not get affected by pandemic. Mostly price in
market arestable from Feb to Jul it ranges between Rs. 4000 to Rs. 4200. In August
month prices of chana rise by19.64%.

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Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 4334 4219 4070 4370 4320 4599 4225 4290 4005 4260 4464 4370
Close 4210 4073 4345 4327 4611 4222 4283 4016 4256 4455 4387 4495

Year 2019

This year market looks very volatile in nature because of natural calamities and trade
war between USA and China. There are so much up and down in this year. In month of
May prices rise by 6.56% in next month in drops by 8.44% again in month of August
again prices
are drop by 6.23% and in September it gain the market by 5.98%. This year’s high price
is Rs.4,595 in month of December and low is Rs. 3,922 in the September

62
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 4015 3850 3680 3765 3502 3520 3470 4233 3817 4121 3995 4733
Close 3846 3668 3769 3480 3508 3470 4220 3865 4094 4011 4706 4350

Year 2018

In this year because of lack of monsoon production from some states of India are gets
reduce therefore prices of chana shows ups and downs in the 3rd and 4th quarter. In
January prices starts losing till April in the may there we find opening and closing
prices are almost same in the form of candle sticks it says as Doji candle it mean the
change in the trend of the commodity or stock, so that why prices of chana starts
growing till November. In December prices are drops by 7.56% from Rs. 4,733 to Rs.
4,350.

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Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 5302 4953 6170 5675 4960 4695
Close 4933 6180 5658 4933 4732 4015

Year 2017

In the year full data are not available we get data after month of July so we analyse
from July2017. In this year on month of August prices are get rise from Rs. 4,953 to Rs.
6,180 by 25.28% from September to December prices are decreasing from Rs. 6,170
to Rs.4,015 by rate of 34.925%.

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 • Cotton

Year
Month 2021 2020 2019 2018 2017
Open Close Open Close Open Close Open Close
January 20,750 20,760 19,570 19,170 21,040 20,560 20,240 19,650 19,350 20,050
February 21,100 21,640 19,540 18,190 20,960 20,080 20,110 20,360 20,440 21,040
March 22,030 21,320 18,400 15,850 20,450 21,060 20,630 20,190 21,010 20,640
April 21,600 21,470 16,140 16,190 21,520 22,280 20,500 20,430 21,240 20,630
May 21,520 23,240 16,350 15,630 22,400 21,730 20,510 21,750 20,900 20,940
June 23,600 24,950 15,950 15,590 21,810 22,370 22,010 21,930 20,990 19,780
July 24,610 27,200 16,100 16,260 21,760 20,500 22,280 22,210 20,070 20,850
August 27,470 26,170 16,260 17,210 20,710 20,810 24,060 22,860 18,500 18,650
September 25,270 28,140 17,800 18,150 19,580 19,870 22,870 21,840 18,650 18,530
October 28,300 33,040 18,200 19,030 19,830 19,500 21,800 21,980 18,450 19,060
November 32,930 30,690 19,310 19,890 19,350 19,050 22,200 21,290 18,180 18,480
December 30,850 33,910 20,020 20,350 19,150 19,330 21,560 20,770 18,740 20,090

65
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 20750 21100 22030 21600 21520 23600 24610 27470 25270 28300 32930 30850
Close 20760 21640 21320 21470 23240 24950 27200 26170 28140 33040 30690 33910

Year 2021

Area under cotton during 2021-22 was 119.66 lakh as against 126.97 lakh in
2020-21. Among the states, Maharashtra is leading in cotton acreage with
39.41 lakh Gujarat (22.51lakh), Telangana (18.78 lakh), Rajasthan (7.08 lakh)
and Haryana (6.88 lakh). The cotton harvest season in Xinjiang of China was
last by mid-November this year, with the output toreach 5.2 million tonnes.
The region has contributed nearly 90 percent of china’scotton

Cotton prices have dropped by 8-10 percent in Telangana with the increase in
arrivals in themarket. Prices have dropped to Rs. 7,830 per quintal from a
high of Rs. 8,710 in few mandis.Prices in other parts of the country have also
dropped by about three percent. Cotton pricesin Adilabad have fallen from
Rs.8,600 to Rs. 7,910.Under these circumstances, Agricultural Market
Intelligence Centre, PJTSAU expects that cotton is likely to trade in price
range between Rs. 7000 – 7500 per quintal during December 2021

66
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 19570 19540 18400 16140 16350 15950 16100 16260 17800 18200 19310 20020
Close 19170 18190 15850 16190 15630 15590 16260 17210 18150 19030 19890 20350

Year 2020

In year 2020 lockdown announced by our honourable PM Modi because of corona

virus so that’s why all major industries are closedown. Cotton is agricultural product
so notget effected by lock down. The current GDP result also says that there are hike
in the production of agri-products its rise by almost 3% by last quarter results.
In the March the prices fall by 12.86% then the prices are variable between Rs. 1600
to Rs.2000 from April to August. High price of the till year is Rs. 20,180 in January
and low isRs. 14,800 in May.

67
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 21040 20960 20450 21520 22400 21810 21760 20710 19580 19830 19350 19150
Close 20560 20080 21060 22280 21730 22370 20500 20810 19870 19500 19050 19330

In this year mainly prices are fall in international market therefor graph looks like
wave fromJanuary its starting loosing price then in month of March its starting gaining
market price in May it goes to peck at Rs. 22,470 and then stared downfall of cotton till
the December. In whole year prices of cotton drops by 8.12%. since Jun the prices fall
by 13.58%

68
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 20240 20110 20630 20500 20510 22010 22280 24060 22870 21800 22200 21560
Close 19650 20360 20190 20430 21750 21930 22210 22860 21840 21980 21290 20770

Through out the year market looks stable because of US China trade war
concern demand of Indian cotton is getting high demand. August, September and
November shows some up anddown in the prices in August opens at Rs. 24,060
and closes at Rs. 22,860 gain by 2.93%. whole year market gain by 2.61%.

69
Month Jan Feb Mar Aprl May Jun Jul Aug Sept Oct Nov Dec
Open 19350 20440 21010 21240 20900 20990 20070 18500 18650 18450 18180 18740
Close 20050 21040 20640 20630 20940 19780 20850 18650 18530 19060 18480 20090

Year 2017

In this year we the prices of cotton are get drop by huge margin. From January to April
pricesare gain by 91.17% then fall in price by 5.54% from July end to August to open
big fall are seen prices drops by 10.55% in end of the year prices gain by 8.71%. the
high of this year is Rs. 21,650 and the low price is Rs. 18,040.

70
 CHAPTER-V

Finding, Suggestion

&
Conclusion

71
 \
Finding

• India's crude oil demand dropped 45.8 per cent in April from a year earlier as a
nationwide lockdown and travel curbs to prevent the spread of novel Corona Virus eroded
economic activity. Consumption of fuel, a proxy for oil demand, totalled 9.93 million
tonnes the lowest since 2007 government data shows.

• State fuel retailers in India sold 50 per cent less refined fuel in the first two weeks of April
than the same time a year earlier as the country came to a standstill due to the lockdown
that was put in place on March 24. State companies Indian Oil Corp, Hindustan
Petroleum Corp and Bharat Petroleum own about 90 per cent of the retail fuel outlets in
the country.

• Though the physical demand for gold is near zero amid the corona virus-related
nationwide lockdown, the price of yellow has seen a sharp surge in recent months. In July,
gold prices skyrocketed with rising around 2.50 percent in the international markets.

• As uncertainties continue to loom over global economic growth amid a series of events
since the start of this year, the safe-haven appeal for gold has skyrocketed and analysts
expect the prices can surge near Rs 52,000 per 10 grams in next 12 months.

• No majorly effect on agricultural commodities in commodity market.

• Chana observers say the bull run in commodity exchanges, running on a thin volume with
hardly. Data for the prices of essential commodities for the last month shows a rising
trend. Chana prices by Rs 3,650/MT during the period.

• Cotton has some effect on when lockdown announced by Government of India but it
recovers in 2 to 3 weeks after that market slowly a price goes increasing.

72
 Suggestions

As per research in the period of covid-19 pandemic there is huge fall in every
sector. Our country is mostly depending on other countries for the crude oil and the
America is the largest oil exporters in the world. Gold has tradition to buy in India,
people are widely interested to buy gold as their first preference of investment. While
unlocking in India the prices if gold goesvery high so big opportunity for making money
from gold.

India is agricultural country so many agricultural commodities are exported from

India. The current result of GDP says that the contribution of agricultural sector is
increased by 3% yearon year. On commodity like chana and cotton no big affected by
covid-19 pandemic.
Researcher suggest that help the farmers give them some helping from Government of
India.

73
 Conclusion

India is one of the top producers of a large number of commodities, and also has a long
history of trading in commodities and related derivatives. Despite this fact, commodity
futures markets are largely underdeveloped. The reason has something to do with the
extensive government intervention in the agriculture sector. Fact is that the production
anddistribution of several agricultural commodities is still governed by the state and
futures trading have only been selectively introduced with stringent regulatory controls.
If futures market has to flourish then market forces will have to be allowed to play their
rolerather than trying to controlling the prices. Some points related to the commodity
market performance in the covid-19 pandemic situation.

• As per the all market are closed down there is no major affect of corona virus on
the agricultural commodity because the agricultural activities are not stopped. In
lockdown period also farmers were doing their activity.

• As per our current records say that in the pandemic period agricultural sector rise
their share in the GDP by last year.

• Big affect on the energy sector in the some crude oil supplier countries the prices
of crude oil are goes in negative for the certain period. Natural gas also suffers in this
pandemic period.

• India is a big market for the gold in the March month when lockdown announced
gets some effect on that time in the month of July it goes to the historical high and it
still ranges in 52 weeks high in current market.

74
CHAPTER-VI.
Bibliography

75
 References

1. Financial Services and Markets by Dr. Punithavathy Pandian

2. The Basics by Erik Banks by Erik Banks Publisher: Routledge

3. Dictionary Of Finance & Banking Oxford by Publisher: Oxford University Press

4. International Finance: Business Perspective by Apte

Author: Apte, P. G. Publisher: Tata McGraw Hill (TMH)

5. Case Study Solutions Finance by Kaushal

Author: Kaushal, H. Publisher: Macmillan

Websites

• www.mcx.com

• www.ncdex.com

• www.investing.com

• www.investopedia.com

76