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

Which of the following is a typical agricultural commodity factor that makes prices seasonal?

Harvest cycles make agricultural prices seasonal: supply is abundant after harvest, so prices are usually lower, and they firm up in the lean season as stocks decline. Monsoon dependence and storage costs reinforce this pattern.

  1. AHarvest cycles that cause prices to be lower after harvest and firmer in the lean seasonCorrect
  2. BFixed government price for all agricultural produce throughout the year
  3. CAbsence of any storage requirement
  4. DConstant supply regardless of monsoon

Explanation

Agricultural supply is concentrated around harvest, so prices tend to be lower then and rise as stocks deplete in the lean season. Supply depends on the monsoon and storage matters, so the other statements are incorrect.

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