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Commodities on a High

posted Nov 12, 2009, 1:07 AM by NAVYUG Info
Majority of commodities in India are on a price hike. This has led to India becoming very uncompetitive in the world trade market. Demand for products like spices and maize have virtually vanished from Bangladesh or South East Asian countries, who have diverted to alternate products/sources (Bangladesh is importing wheat bran from Ukraine). These high prices are supported by the high local demand in India itself, which has led to higher imports, which in turn is going to have a negative effect on India's Balance of Trade. 

Added to this, is the steep appreciation of the Indian rupee in the past one week or so which has added further pressure on the costing. Going forward the rupee doesn't seem to be weakening in the near term. So we are left with the commodity prices itself, which should correct in the coming 1-2 weeks, as the local requirement for the coming 1 months or so has already been fulfilled and the global demand is also subdued. Smart players don't need to be told what to do now. 
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