CSRL organize a policy adda on 25 January 2017 about Commodity Market . First CSRL want to thanks our resource person Mr. Habibur Rahman (Bangladesh Institute of Bank Management) to explain us about Commodity Market and it’s opportunity in Bangladesh.
A commodity market is a place where buyers and sellers can trade any homogenous good in bulk. Grain, precious metals, electricity, oil, beef, orange juice and natural gas are traditional examples of commodities, but foreign currencies, emissions credits, bandwidth, and certain financial instruments are also part of today’s commodity markets. A market will flourish for almost any commodity as long as there is an active pool of buyers and sellers.
Commodities are split into two types: hard and soft commodities. Hard commodities are typically natural resources that must be mined or extracted (such as gold, rubber and oil), whereas soft commodities are agricultural products or livestock (such as corn, wheat, coffee, sugar, soybeans and pork). Each and every product should categorize/standardization for fare pricing.
There are numerous ways to invest in commodities. An investor can purchase stock in corporations whose business relies on commodities prices, or purchase mutual funds, index funds or exchange-traded funds (ETFs) that have a focus on commodities-related companies. The most direct way of investing in commodities is by buying into a futures contract. A futures contract obligates the holder to buy or sell a commodity at a predetermined price on a delivery date in the future. In every country should have Trading Commission to regulate commodity futures and options markets. Country Trading Commission objective is to promote competitive, efficient and transparent markets that help protect consumers from fraud, manipulation and unscrupulous practices.
There is no Commodity Market in Bangladesh. Here it can be product base commodity exchange. Investor, Bank, producer, whole-seller, warehouse owner, transport company, collateral management company should take ownership and create a Commodity Market exchange. Chain benefit should show to these interest group to make it happen. Tea Board is a good example in Bangladesh. We can utilize UP cyber center, local market and NGO sector to make it happen