Indian economy is always categorized under the mixed economy. Commodities would always mean item related to food, metals, petroleum, agricultural produce and others. We will discuss about the commodity trading account in India.
About Commodity Trading Account:
A physical market platform available for trading raw/primary products is known as good commodity trading account. Commodity that is traded would consist of goods of values, consistency in quality, and good suppliers like wheat, coffee and sugar. Furthermore, in the world there are approximately, 600 primary commodities available to be traded in India.
Types of Commodity Trading Account:
Commodity Trading Account is divided into two types namely, the hard and soft commodities.
Hard commodities refer to products that can be mined/ extracted like coal, gold, diamond, rubber, aluminium and oil.
Soft Commodities always refer to the agricultural products like the wheat, vegetables, fruits, corn, coffee, sugar, grams, pulses, dal and others.
The concept of trading is influenced by the concept of supply and demand in India. Hence, one can say that limited supply of products will cause a price increase, and increase in supply of products causes a price decreases.
Fundamentals of demand and supply play a major role in offering the investors, entrepreneurs, and common man to have excellent returns. A good and effective interface, with super research and knowledge will be the ultimate key.
Advantages Of Commodity Trading Account:
Tremendous benefits are available, for an individual to undertake trading in commodity trading account in India. Some of the positives are as follows:
Power of Influence: An effective trading of the community trading account is done based on certain rules in India. Investor will deposit only a part of the money in order to cover problems.
Liquidity : Various investments is taking place and investment in commodity trading account helps to reach immediate, short and long term returns in India.
Profitable Returns: Commodity trading account is the most hazardous form of investment. It is due to frequent changes in the prices of the commodities in India.
Ultimate Transparency: Trading in the commodity helps in offering the greatest transparency. Furthermore, a good transparency helps in having future exchanges without any mediation by seller/buyer.
Effective Risk Management: A good commodity trading account helps in effective risk management. It can be done using market updates and real time trades reports in India.
Helps Agricultural Segment: Spectacular commodity trading account helps in undertaking agricultural growth. It helps farmers to know about the price forecast of the essential commodities in India and sell/buy accordingly.
Disadvantages Of Commodity Trading Account:
The negatives of the Commodity Trading Accounts in India are given below as follows:
ØInvestment in the future market is very risky.
ØOne has to deal with frequent losses and profits in the years to come.
ØData can be highly misleading.
ØInvestors are not familiar with complex terms like stock/bond markets.
ØInteresting investment plans/strategies are there, which are complex leading to confusion.
ØAssets in some segment like the energy, petroleum tends to have great risk.
ØYou need a financial expert to walk through the procedure in a logical manner.
ØNot able to update yourself with constant details, lead to disorder.
Mandatory Documents Required or Opening Individual Commodity Trading Accounts In India:
ØYou need the PAN Card, Passport, Voter Id, Driving license Xerox.
ØResidential proofs like the Xerox of house agreement, front copy of bank account, Aadhar Card, Electricity bills, Telephone bills.
ØOne Cancelled Cheque giving details about your name, account number.
Ø4 Passport Size Photographs
ØBanks statement duly attested by bank official and signature.
Document Mandatory For Opening Proprietorship Account In India
ØPassport size photo of the owner/founder.
ØPAN Card Xerox of the owner.
ØBank copy Xerox giving details about the firm and the owner.
ØOwnership firm stamped document with the signature of owner.
ØDeclaration of the owner in the original letter of the document must be submitted as per Annexure-3.
Vital Document Needed For HUF (Hindu Undivided Family) In India
Documents required for the Hindu Undivided Family (HUF) are given below as follows:
ØRecent passport size photo of the person.
ØPAN Card Xerox of the HUF and executor.
ØAddress proof in the name of the HUF and the executor.
ØSignature of the executor and all the family members of the HUF. (Minor/Major)
ØDeclaration as per the Annexure-7
ØHUF stamp should be fixed on all documents bearing the executor’s signature.
Mandatory Document Needed When Commodity Trading Account Opened For Partnership Firms In India:
Some of the important document required for opening commodity trading account for partnership firms in India
are as follows:
ØYou must have the Pan Card Xerox of all authorized partners of the firm.
ØPhotos of all authorized partners of the company.
ØAddress proof in the name of partner and associate partners.
Ø Xerox of the Bank Account front page cover in the name of partnership firm.
ØPartnership Deed containing details of the partners and attested by other partners.
ØPartnership stamps to be attached on all documents bearing signature of partners.
ØLatest Xerox copy of Income Tax Returns (ITR), done by the partnership firms.
ØAuthority letter signed by all partners of the firm, with original letterhead, having stamp and signature as per Annexure-4.
So, community trading is fast catching up in India and my advice will be to latch on to futuristic options of the various commodities trading account in India. It is the finest way, bearing fact that future agreements do have open ended risk.