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As usual, Indian commodity markets followed global markets towards South Thursday as fundamental commodity-specific factors along with concerns over weaker global economic growth and the Euro zone debt crisis led for ..

22 Sep 2011

NEW DELHI (Commodity Online) : As usual, Indian commodity markets followed global markets towards South Thursday as fundamental commodity-specific factors along with concerns over weaker global economic growth and the Euro zone debt crisis led for the recent fall.

However, agriculture commodities in India remained on the higher side despite country's record grain output. India’s production of food has reached a historic all-time high, rising 11% over last year’s.

Analysts said food prices in the country is unlikely to ease soon as the nation still lacks basic amenities for storing its bumper output and also failed to distribute in a systematic way to its millions of people.

That resulted in tight supply conditions and continued demand always exerts further upward pressure on prices.

That is the primary reason for the growth of India’s commodity markets as commodities will continue to offer value for investors despite risk aversion and potential volatility across markets.

Analysts are of the view that uncertainties in the market can impact traditional asset classes and commodities differently as investors will continue to benefit from the diversification benefits that commodities provide.

Major food grains except rice exceeded India’s production targets last time that includes wheat, coarse cereals, maize and soybean.

India produced 241.56 million tons of food grains during 2010-11, producing 23 million tones more than the last crop year and missing the government’s target of 244 million tons by a whisker.


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