Apart from demand and supply, the "other factors" include the trend in the last two years of looking at commodities as a "currency" for store of value by investors.

The boom in commodities in the in-ternational market can be ex-plained primarily by demand and supply and various other factors. On the demand side, the dominant factor has of course been the demand from China and India. The world economy is slated to grow at 4%. High growth rates in the Asian economies particularly in China and India and economic revival in the EU and Japan have increased the demand for basic agricultural products (cereals, pulses, sugar and cotton), energy sources (crude oil, ethanol) and scarce resources such as metals and minerals. On the other hand, supply or increase in production has remained tight due to supply constraints or disruptions in production. In fact, the commodity boom is expected to perpetuate for another 15-20 years on account of inherent growth processes in the world economy.

With regard to India, according to the Central Statistical Organization, the real GDP growth in 2004-05 was 7.5%. The economy continued the good run and registered an 8.1% growth in 2005-06. The agricultural sector saw a growth of 2.3%; industry recorded a growth of 8% while the services sector grew by 10.1%. The growth in the economy has fueled the demand for raw materials and commodities.

Prices are being driven by both domestic and global influences. Commodities such as crude oil, steel, aluminum, copper, bullion, soya, sugar, coffee, etc. which are global in nature have their prices being driven by global developments.

The Analyst Magazine, Commodity Boom, International Markets, Asian Economies, Agricultural Products, Central Statistical Organization, GDP Growth, Agricultural Sectors, Global Developments, Global Economy, Gross Domestic Product, GDP, Global Currency Markets, Commodity Markets, Retail Segments.