Soaring returns in the futures markets, for long linked to non-agri commodities like gold, copper and crude, have new claimants. Agri-commodities such as guar, urad, chilli and soyabean have, in the last three months, been tossing up hefty returns — in some cases outshining accepted products like crude.Take, for instance, the case of guar seeds — the November contract prices have shot up from Rs 1,565 to Rs 2,389 per 100 kg, earning investors a handsome 60 per cent return. Similarly, chilli prices for November delivery have risen from Rs 2,140 levels to Rs 3,496 — returns here again topping 60 per cent.Same is the case with other commodities like urad with 57 per cent returns, chana (20 per cent), jeera (27 per cent), turmeric (25 per cent) and pepper (23 per cent). Even sugar and wheat at 8 per cent and soayabean at 18 per cent have smiled at investors.True, non-agri products like crude — up from Rs 2,490 to Rs 3,102 per barrel with 25 per cent returns — and copper — rising to Rs 189 per kg from Rs 138 with 8 per cent returns — haven’t done bad either. But as is evident, their returns have suddenly paled in comparison to products as guar and chilli.Analysts say agri-products stealing the thunder from their opposite numbers have to do with a combine of fundamentals and speculation at play. If the price rise in commodities like pulses are associated with the floods in different parts of the country — stakeholders fearing short-supplies — others like guar are still under the spectre of speculation. Also, large-scale hoarding of products is common during the festive season.Incidentally, while this upswing in prices of agri-products is in line with the bullish phase of the commodity futures market, analysts say the trend shows that investors are willing to take bigger risks. ‘‘Higher returns mean higher risks too. Investors taking positions should also be prepared to absorb risks. But the present lot are not investing blindly, rather they do with some sort of market information,’’ Sushil Sinha of Geojit Securities said.But the price momentum in favour of agri-products may not persist for long. With the festive season — the key driving factor for prices — nearing its end, rates of most agri-commodities are likely to fall, say analysts. It would then be back to the crude and copper days for investors.
