Banking regulator RBI has reclassified persistent rise commodity price as 'high risk' to the economy against conceiving it as moderate systemic risk last October.

In the Biannual Financial Stability Report released on Monday, RBI said the sustained buoyancy in commodity prices had fuelled expectations of a commodity supercycle building up, with the peak not yet in sight.

The spiralling prices are also fuelling concerns on the potential impact on inflation across commodity importing countries. The rise in food prices could pose grave risks of increased food insecurity and undernourishment in some low-income economies.

Domestically, the near-term growth outlook faces headwinds from supply-side constraints, surging global commodity prices, large swings in capital flows and global spillovers from financial market volatility that is in turn contingent upon policy stances of systemic economies.

Hasty withdrawal of policy stimulus to support growth before sufficient coverage of the vaccination drive can sap macro-financial resilience and have unintended adverse consequences, said RBI report.

Global commodity markets have recorded a broad-based upswing in prices in the recent period. Sharp rebounds in key economies and improvement in international trade, combined with shortfalls in essential food items, have propelled the upsurge, with ample global liquidity contributing to the financialisation of commodity markets, said the report.

Reflecting the strong demand for commodities, the benchmark domestic commodity derivative indices -- MCX iCOMDEX composite and NKrishi14 index -- gained 6.2 per cent and 28.3 per cent in the first half of this year.

Apart from external forces, domestic factors such as increased export demand, pent-up domestic demand and commodity-specific demand–supply imbalances are driving up prices.

While commodity indices jumped sharply, commodity derivatives recorded a lower turnover in five months of this year than the preceding five months, driven by a fall in bullion trading, which constitutes half of the aggregate turnover.

While the turnover of futures contracts declined by 12.4 per cent, that of the options segment increased by 13.9 per cent. Traded volumes in tonnes increased for agriculture and energy and decreased for bullion and metals, it said.