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NISM Certifications · NISM-Series-XV: Research Analyst · Fundamental Analysis of Commodities

For an agricultural commodity, the opening stock is 20 lakh tonnes, production is 300 lakh tonnes, imports are 10 lakh tonnes and domestic consumption is 305 lakh tonnes, with exports of 5 lakh tonnes. What is the closing stock, and what is the stock-to-use ratio, where use is consumption plus exports?

Closing stock is 20 lakh tonnes and the stock-to-use ratio is about 6.5%. Supply of 330 lakh tonnes less use of 310 lakh tonnes leaves 20, and 20 divided by 310 is roughly 6.45 percent.

  1. A20 lakh tonnes; about 6.5%
  2. B20 lakh tonnes; about 6.6%Correct
  3. C25 lakh tonnes; about 8.1%
  4. D15 lakh tonnes; about 4.8%

Explanation

Supply = 20 + 300 + 10 = 330. Use = 305 + 5 = 310. Closing stock = 330 - 310 = 20 lakh tonnes. Stock-to-use = 20/310 = 6.45%, which rounds to about 6.5%. Re-check: 20/310 = 0.0645, so the correct option is the one at 6.5%; 6.6% is incorrect.

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