How beneficial is the commodity market for the Indian farmer?

The commodity market can be a great way of letting the farmer get their dues. But due to some reasons the farmers are not able to cash in the benefits even after getting commodity tips from the experts. They lose out most of the amount to the middlemen. The commodity market has grown over the years, but the growth is mainly noticed in the commodities other than the agricultural ones. Farmers due to various reasons have evaded their producers from the future market, which could easily earn them huge returns.

Price fixation by government

The price of the agricultural crops is declared based on what the Commission for Agricultural Costs and Prices (CACP) recommends. They do proper research work before deciding on the price because they want the farmers to enjoy some benefits after all the hard work they put in for the whole year. When they are recommending the price they think of the following aspects –

The farmers need the help of better technology so that they can provide maximum production and for these if they get some incentives than that will be a great help for them so before recommending the price the incentive part is taken into consideration

Another aspect of the recommendation is the land, when the price is recommended they make sure that the farmer is able to make use of their land in a coherent way. Even the production resource doesn’t get wasted if the farmers properly utilize them.

The price policy will have an effect on the whole economy

The administered prices have been recommended in two sets – Minimum Support and Procurement prices. When the trading firms provide MCX tips to the investors they keep all this in mind as these aspects will decide the price after all.

Commodities for futures trading

If you ask any expert trader they will inform you that not all commodities can be used for future trading. As per the MCX tips provided by them it is said that in order to consider any commodity for futures trading the demand and supply should be there in a huge quantity. It must not be controlled by any government body and it must be fluctuating too. Another important thing about the commodity in futures trade is that the good must be long lasting and it can also be standardized and not only that even gradation is equally important.

If any commodity fulfills all these points, then only it will be considered for the Forward Contracts.

Various factors of futures market

The Government is making all kinds of efforts to provide the farmers with their dues and ensuring that they are in good state. They are the ones who are providing us with food every day, therefore it becomes important that they receive their money without any middlemen.

The commodity market has been one of the oldest markets in India and since its origin, it has been working in an organize way. Though India is an old player in this field yet the popularity of the commodity market grew high within the last few years. Now the trading firms have come up and they have been helping the investors with commodity tips to make profit from this volatile market.

Author Bio:  Raj Mehra – A professional blogger/ commodity tips consultant for all kinds of content related to MCX, commodity and trading.

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