In: Business and Management

Submitted By nairsoumyak
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History of commodities:
There is a belief among the economists that the principles, functions, trading and fundamentals of commodities exchange are centuries old and are been practiced since a long time. These kinds of markets were established in Greece and Rome for the fist time with a fixed time and place for trading, common barter and currency system, and practice of contracting for a future date. There are evidences which shows the fact that the first exchange similar to those of today were established in France and England in the 15th, 16th and 17th centuries.
In the 18th century, commodity exchanges followed some of the practices of the medieval fair (where in a marketplace was created to trade commodities) in adopting rules for self-regulation and methods of arbitration and enforcement. During this period the trade was restricted only to the local areas. This trade was declined its importance when there was an enhancement in the telecommunication, transportation and with the advent of modern cities. Specialized market centers were developed in their place in many parts of the world, which facilitated Spot, or cash, trading and forward contracting.
The Chicago Board of Trade was the first commodity exchange in the United States of America to be opened in 1848, and is still the largest exchange as well. The futures contract was developed here in the 1860s. The New York Cotton Exchange founded in 1871 was also among few other early United States exchanges. During the Great Depression of 1933, the Commodity Exchange, Inc. was established. It was started in New York and by the merger of four smaller exchanges - the National Raw Silk Exchange, the Rubber Exchange of New York, the National Metal Exchange, and the New York Hide Exchange.
India has a link with the commodities market as India is an agro based economy and is the largest consumer of gold, which…...

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