Commodity markets are picking up. If you want to diversity your investment portfolio, you’d better turn to commodities.

But when you do that, take an informed decision after having a thorough knowledge on commodities, experts advised investors.

They were giving a bird’s eye view of the commodities market, with a focus on agriculture commodities and gold, at a stakeholder awareness and education seminar on the subject.

The seminar was organised by The Hindu Business Line in association with Forward Markets Commission (FMC) and NCDEX here on Wednesday at the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI).

Somesh Vaidya, Deputy Manager – Products and Business of NCDEX related the birth and rise of the commodities markets in India and how these markets are better than the traditional one-to-one or bilateral trading agreements.

“The commodities exchanges offer you a transparent market place. They will tell you the correct positions of trading unlike in the bilateral trade where everything is wrapped in secrecy. If you want to take a forwards position, you can quickly to go the exchanges to have an idea of the going price internationally,” he said.

“Neutrality is the biggest advantage of the commodities market. There is no conflict of interest and the deals are standardised unlike in the traditional markets where everything is customised,” he felt. Devendra Surana, President of FAPCCI, said volatility in commodity prices would only grow globally. “The demand for commodities is growing exponentially. It will grow in the coming years. It (the price of a commodity) is no longer based on the cost of production. It depends on the demand. Any slight change in supply could significantly change the price,” he said. “How does one adjusts his business and increase one’s capacity to manage risk hold the key,” he pointed out.

G. Chandrasekhar of the Hindu Business Line, said plans are afoot to hold similar meetings in smaller towns.

(This article was published on January 23, 2013)
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