IntroductionThe economy of India is one of the fastest growing economies in the world. The post independence period of India, was marked by economic policies which tried to make the country self sufficient.All the sectors that is food prices, crude oil, real estate, stock exchange and gold are the back bone of the society and these sectors are indicators of economic growth. The scope of these sectors affects each individual in the society. Any relationship among these factors may help investors in taking better decision.Relationship between food commodities and crude oil The current global food system is highly fuel-and transport-dependent. Fuel will certainly become less affordable in the near future, making the current, highly fuel-dependent agricultural production system less secure and less affordable. It is therefore necessary to promote food self-sufficiency and reduce the need for fuel inputs to the food system at all levels.The connection between food and oil is systematic, and the prices of both food and fuel has risen and fallen more or less in the same tandem in the recent years. Modern agriculture uses oil products to fuel farm machinery, to transport other in puts to the farm, and to transport farm output to the ultimate consumer. Oil is often used as input in agricultural chemicals. Oil price increases therefore put pressure on all these aspects of commercial food systems.Bio-fuel production started approximately in 1990, but the total volume and growth was modest. Biofuel production reached significant level in 2000 approximately, and started with ethanol and biodiesel. Ethanol can be produced from sugarcane, sugar beetroot, wheat, barley and corn and has represented a major part of biofuel production since 2000. Palm, rapeseed, sunflower, soya and other vegetable oils or animal fats can be transformed in to biodiesel. The U.S and Brazil are the main producers of ethanol , while biodiesel is produced in the European Union.Figure 1. World biofuel production (thousand barrels per day) Source: United States Energy Information Administration. Figure 1 illustrates world biofuel production since 2000. 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Notes: Indices based on world prices in US Dollar. Oil Price Index is the average of WTI, Brent, Fateh. The Food Price Index consists of Cereal, Vegetable Oils, Meat, Seafood, Sugar, Bananas, and Oranges.Source: IMF. Figure 2 illustrates various relevant developments. First, food prices were subject to price increases in the last years; there is a clear upward trend starting in 2003 or 2004. Second, since roughly 2006 food prices have moved up and down more sharply than previously; price volatility increased. Third, food prices apparently have developed a tendency to co-move more with oil prices than before.

Figure 1: Evolution of food and fuel prices, 2000 to 2009Sources: US Energy Information Administration and FAO.

Thus there is a concern that high and volatile prices of crude oil may cause prices to continue to increase.(Bloomberg, 2011). Moreover, oil prices rise, so does demand for bio-fuel, which are the only non-fossil liquid fuels able to replace petroleum products in existing combustion engine and motor vechiles. But bio-fuels are often made from corn and other agricultural products. As the demand for these alternative fuels increases, crop prices are forced upwards, making food even less affordable.These data have been analyzed by applying stochastic volatility models and resorting to Bayesian econometric analysis for the estimation of the models parameters. The same result has been shared by Nazlioglu et al. (2013) by extending the scope of agricultural commodities considered (wheat, corn, soybeans, and sugar) and raising their frequency to daily prices observed over a longer sample from 01 January 1986 to 21 March 2011. Nazlioglu et al. (2013) apply a different method which corresponds to the causality in variance test and impulse response functions. In order to identify the impact of the food price crisis, Nazlioglu et al. (2013) divided the data into two sub-periods: the pre-crisis period (January 1986-31 December 2005) and the post- crisis period (01 January 200621 March 2011). Their findings mention that, with theexception of sugar, volatility spillover between oil and agricultural markets is absent in the pre-crisis period and is confirmed during the post-crisis period.

In fact, most of these studies highlight the significant volatility linkages between oil prices and most food commodities prices which is deepened through biofuel sector growth (among others: Baffes, 2007; Akram, 2009; Balcombe, 2011; Ciaian and Kancs, 2011; Busse et al., 2011). These studies agree on the fact that oil price volatility translates into food price volatility through two key elements. The first one corresponds to transportation costs and fertilizer prices. The second element is related to biofuels and the expanding use of agricultural commodities as feedstocks for biofuel production. This agreement, taken alone, leads to think that transmission of oil price volatilities to crop prices may be more rapid.

Export- led agricultural strategies also increase the worlds vulnerability to high oil prices. Most donor agencies have encouraged the less industralised countries to focus on the production of cash crops at the expense of staples for local consumption. As a result, people in these countries are forced to rely increasingly on imports of often subsidized cereals or those funded by food aid programmes. However, rising transport cost contribute to rising prices of food imports, making them ever less affordable. Fuel cost represents almost 50 to 60 percent of total shipping costs. From early 2007 and in mid-2008, as the fuel prices soared, the cost of shipping food aid climbed by about $50 per ton a nearby 30 % increase, according to United States Agency for International Development(Garber,2008)

Meanwhile the poor farmers who cannot afford machinery, fuels and commercial farm inputs find themselves at a disadvantage in the global food economy. Compounding this are the agricultural policies in the industralised food exporting countries that subsidized domestic producers and dump surpluses on to the developing countries, thus adding to the economic disadvantage of the smallholders farmers in those countries. As a result millions of those farmers are driven out of business annually, those countries are giving inceasing priority to production for export and they are witnessing a landless poor urban class that is cronically malnourished and hungry.Soaring food and fuel prices have a disproportionate impact on developing countries and on poor people in developed countries. Americans, who, on average, spend less than one tenth of their income on food, are able to absorb the higher food prices more easily than the worlds poorest 2 billion people, who spend 50 to 70 per cent of their income on food.Why are oil prices so high? Speculative investment in commodities plays a role, though there is a persuasive case to be made that oil prices would be rising even if oil futures speculation were entirely curtailed. The oil industry is changing, and rapidly.

As Jeremy Gilbert, former chief petroleum engineer for BP, has put it, The current fields we are chasing weve known about for a long time in many cases, but they were too complex, too fractured, too difficult to chase. Now our technology and understanding [are] better, which is a good thing, because these difficult fields are all that we have left (Gilbert, 2011).The trends in the oil industry are clear and undisputed: exploration and production are becoming more costly, and are giving rise to greater environmental risks, while competition for access to new prospective regions is generating increasing geopolitical tensions. According to the International Energy Agency, the rate of world crude oil production reached its peak in 2006.[IEA 2010a) The IMF has joined a chorus of energy industry analysts in concluding that scarcity and high prices are here to stay.[IMF 2011a, 2011b]A collapse in demand for oil resulting from sharply declining global economic activity could cause oil prices to fall, as happened in late 2008. Indeed, this is a fairly likely possibility. But while it would make oil cheaper, it would not make fuel more affordable to most people. It is theoretically possible for the world to curb oil demand through policies that limit consumption, and it is also conceivable that some unexpected technological breakthrough could rapidly result in a cheap, effective alternative to petroleum. However, these latter two developments are rather improbable. Thus there is no likely scenario in which the services provided by oil will become more affordable within the context of a stable global economy at any time in the foreseeable future.While wealthy consumers are able to absorb incremental increases in food prices, a sudden interruption in the availability of fuel (due to geopolitical events) or a significant gradual curtailment of fossil fuel production (due to the continuing depletion of world hydrocarbon reserves) could lead to a breakdown of the food system at every level, from farmer to processor to distributor to retailer and finally to consumer.To summarize, high oil prices contribute to soaring food prices. Our modern global food system is highly oil-dependent, but petroleum is becoming less and less affordable. Extreme weather events also contribute to high food prices, and, to the extent that such events result from anthropogenic global warming, they are also ultimately fuel-related. Thus there is no solution for the worlds worsening food crisis within current energy and agricultural systems.What is needed is a major redesigning of both food and energy systems. The goal of managers of the global food system should be to reduce its dependence on fossil energy inputs while also reducing GHG emissions from land-use activities. Achieving this goal will require increasing local food self-sufficiency and promoting less fuel- and petrochemical-intensive methods of production.Given the degree to which the modern food system has become dependent on fossil fuels, many proposals for delinking food and fossil fuels may seem radical. However, efforts to this end must be judged not by the degree to which they support the existing imperatives of the global food system, but by their ability to solve the fundamental challenge that faces us the need to feed a global population of seven billion (and counting) with a diminishing supply of fuels available to fertilize, plough and irrigate fields, and to harvest and transport crops. Farmers need to reduce their dependence on fossil fuels in order to build resilience against future resource scarcity and price volatility.In general, farmers can no longer assume that products derived from petroleum and natural gas (chiefly diesel, gasoline, synthetic fertilizers, and synthetic pesticides) will remain affordable in the future, and they should therefore change their business plans accordingly. While many approaches could be explored, which in any case would depend on specific geographic locations, the necessary outlines of a general transition strategy are already clear. Farmers should move towards regenerative fertility systems that build humus and sequester carbon in soils, thus contributing to solving climate change rather than exacerbating it.Farmers should reduce their use of pesticides in favour of integrated pest management systems that rely primarily on biological, cultural and physical controls.More of the renewable energy that will power farming activities can and must be generated on farms. Wind and biomass production, in particular, can provide farmers with added income while also powering farm operations.Countries and regions must undertake proactive steps to reduce the energy needed to transport food by reorganizing their food production systems. This will entail support for local producers and for local networks that bring producers and consumers closer together. More efficient modes of transportation, such as ships and trains, must replace less efficient modes, such as trucks and planes.The end of the fossil fuel era should also be reflected in changes in dietary and consumption patterns among the general population, with a preference for foods that are grown locally, that are in season, and that undergo less processing. Also, a shift away from energy- and meat-intensive, diets should be encouraged.With less fuel available to power agricultural machinery, the world will need many more farmers. But for farmers to succeed, current agricultural policies that favour larger-scale production and production for export will need to change in favour of support to small-scale subsistence farming, gardening and agricultural cooperatives. Such policies should be formulated and put in place both by international institutions, such as the FAO and the World Bank, and also by national and regional governments.Second chances in life are rareBut if you missed buying some of the defining stocks of the Internet era (and the MASSIVE returns that came with them), that's exactly what the market is now giving youThat's because of a technology that got its start as a little-known gadget in Bill Gates $147.5 million mansion. The Economist is calling it "transformative"... But you'll probably just call it "how I made my millions."

If such a transition is undertaken proactively and intelligently, there could be many additional benefits, with more employment in farming, more environmental protection, less soil erosion, a revitalization of rural culture and significant improvements in public health. Some of this transformation will inevitably be driven by market forces, led by the rising price of fossil fuels. However, without planning, the transition may prove destructive, since market forces acting alone could bankrupt farmers while leaving consumers with few, if any, options for securing food supplies. Removing fossil fuels from the food system too quickly, before alternative systems are in place, would be catastrophic. Thus the transition process requires careful consideration and planning.There are reasons for hope. A recent report on African agriculture by UNCTAD and UNEP (2008) suggests that organic, small-scale farming can deliver the amount of increased yields thought to be possible only through industrial farming, and without the environmental and social damages caused by the latter. Recent research by Badgley et al. (2007) also concludes that organic and low-input methods can increase yields in developing countries while maintaining yields in industrialized countries.Generally, smaller farms have greater biodiversity (Hole et al., 2005), place greater emphasis on soil-building (DSouza and Ikerd, 1996) and display greater land-use efficiency than large farms (Rosset, 1999).Nevertheless, despite these promising trends and findings, it is axiomatic that no food system tied to the earths finite soil and water resources can support an ever-expanding and ever more resource-demanding population. The prudent path towards reforming the global food system must therefore coordinate agricultural policy with appropriate population, education, economic, transport and energy policies. The transition to a post-petroleum food system will need to be comprehensive. In its scale and required speed it promises to be one of the greatest challenges in human history. But the challenge will only grow the longer it is postponed.

As on 08/06/2015 by usda.gov(United States Department of Agriculture)

Percentage change in all items consumer price index(CPI) and food CPI, 1984-2014Percentage ChangeSource: USDA, Economic Research Service using Bureau of Labor Statistics data

Percentage change in the Consumer Price Index(CPI) by sub-category, 1984-2014

2015 inflation predicted to be near historical average Percent Change

Source: USDA, Economic Research Service using Bureau of Labor Statistics data.Percent change in the annual Consumer Price Index (CPI) for food at home, 1995 - 2015

India Wholesale Price Index ChangeProducer Prices in India dreased 2.65 percent in April, 2015 over the month in the previous year. Producer prices change in India averaged 7.63 percen from 1969 until 2014 reaching an all time high of 34.68 % in September of 1974 and a record low of -11.31 percent in May 1976. Producer Prices in India is reported by Office of the Economic Advisor, India.

In India the wholesale price Index(WPI) is the main measure of inflation. The WIP measures the price of a representative basket of wholesale goods. In India, wholesale price index is divided in three groups primary articles(20.1 percent of total weight), Fuel and Power (14.9 percent) and Manufactured Products (65 percent). Food articles from the primary Articles Group account for 14.3 percent of the total weight. The most important component of the Manufactured Products Group are Chemicals and Chemical products ( 12 percent of the total weight); Basic Metals, Alloys and Metal Products(10.8 percent); Machinery and Machinery Tools(8.9 percent); Textiles(7.3 percent) and Transport, Equipment and Parts(5.2 percentage) Content for - India Wholesale Price Index Change - was last refreshed on Monday, June 8, 2015. Indian wholesale prices fell 2.65 percent year-on-year in April of 2015, following a 2.33 percent drop in the previous month, as petrol prices declined further while food cost slowed. The index has been in the negative territory since November 2014.

Year-on-year, petrol prices fell 18.44 percent, following a 17.70 percent drop in the previous month and cost of diesel decreased by 14.39 percent, following a 12.11 percent fall in March.

Food prices rose 5.73 percent, slowing from a 6.31 percent increase in March. Among food prices, onion recorded the highest increase (+29.97 percent), followed by pulses (+15.38 percent), fruits (+14.22 percent); milk (+7.42 percent); egg, meat & fish (+4.01 percent); wheat (+1.79 percent) and cereals (+0.39 percent). In contrast, prices fell for potato (-41.14 percent), minerals (-28.65 percent), fibres (-13.81 percent), non-food articles (-6.18 percent), oil seeds (-1.80 percent), vegetables (-1.32 percent) and rice (-0.04 percent).

In April, cost of manufactured products declined by 0.52 percent from a 0.19 percent drop in the previous month.

On a monthly basis, wholesale prices declined 0.1 percent, following a 0.2 percent increase in March.

Crude oil chart from Tradingeconomics.com on 08/06/2015

Crude Oil Production in India decreased to 773 BBL/D/1K in December of 2014 from 782 BBL/D/1K in November of 2014. Crude Oil Production in India averaged 690.71 BBL/D/!K from 1994 until 2014 reaching an all time high of 813 BBL/D/!K in November 2010 and a record low of 526 BBL/D/1K in May 1994. Crude Oil Prodution in India is reported by the U.S Energy Information Administration.

Relationship between food commodities and gold

History of Gold

In the Classical Era 5,000 years ago in Egypt and the Middle East: Gold and other metals fulfilled the classical function of money. In 560 BC, Lydian king Croesus was the first to produce standardized gold coins which were of the same size and value. The minted coins guaranteed, besides its propaganda function, the value and quality of the precious metal. In 225 BC, the Roman Empire used the first gold coins: This was a response to the devaluation of their silver currency, caused by the oversupply of silver coming from the new Roman colonies. In the Middle Ages, silver as preferred coin metal and gold was more and more used only as a value storage instead of a means of payment, as this metal was rarer and more valuable than silver. In the 14th and 15th century due to the decline of European mining, leading to a reduction in new gold supplies. During this same time, coin production decreased by 80%. This made gold in circulation rarer and increased the price for this precious metal, and lead to a continuous deflation.Early Modern Times Second half of the 16th century, gold coins further lost their value: This is because gold coins were combined with other metals, such as copper, and lost its purity. More low-grade coins were brought into circulation due to the Seven Years War (17561763).Fixed gold-silver conversion rate and gold standard: In the United Kingdom, Sir Isaac Newton, warden of the Royal Mint, determined the conversion rate of gold and silver. This helped to ease the big fluctuations of gold coins. In 1774 the British Parliament introduced the gold standard. Here, the strengths of the currency is determined by the national gold reserves.Bimetallism of the 18th and early 19th century: Other European countries and the United States minted at the same time gold and silver coins. The basis was a fixed conversion rate between these two metals.

For many developing economies high inflation is a reality and high food prices are putting pressure on real income all over the world. To begin our investigation into gold, since 2007 the world has seen a period of striking economic and financial volatility, featuring the deepest recession since 1930s and steep decline in the value of many financial assets. Against this gold has performed strongly with its price doubling since the global financial crisis began in mid-2007.Gold performance in this period has sparked something of a reappraisal of its characteristics as an asset and led some to revisit its proper place in investors portfolios. As a store of value which is relatively immune to inflation, financial crisis and credit default, gold has been used for centuries to protect individuals wealth. These special properties are borne in the recent performance of gold, and investors may continue to value them given the significant uncertainties still facing the global economy.

Dated:08/06/2015

India Gold ReservesGold Reserves in India remained at 557.75 tonnes in the fourth quarter of 2014 from 557.75 tonnes in the third quarter of 2014. Gold Reserves in India averaged 427.75 tonnes from 2000 until 2014, reaching an all time high of 557.75 tonnes in the fourth quarter of 2009 and a record low of 357.75 tonnes in the second quarter of 2001. Gold Reserves in India is reported by the World Bank Council.

Gold reserves are countrys gold assets held and controlled by the central bank.

Relationship between food commodities and stock marketAs per the data collected on 09/06/2015 as per trading economics on 16/03/2015The India Stock Market (SENSEX) decreased to 26768.49 Index points in June from 27828.44 Index points in May, 2015. Stock Market in India averaged 6846.88. Index points from 1979 until 2015, reaching an all time high of 29681.77 Index points in January of 2015 and a record low of 113.28 Index points in December of 1979.

The SENSEX (BSE) is a major stock market index which tracks the performance of 30 major companies listed on the Bombay Stock Exchange. The companies are chosen based on the liquidity, trading volume and industry representation. The SENSEX, is a free-float market capitalization-weighted index. The Index has a base value of 100 as of 1978-79. This page provides - India Stock Market (SENSEX) - actual values, historical data, forecast, chart, statistics, economic calendar and news. Content for - India Stock Market (SENSEX) - was last refreshed on Monday, June 8, 2015. Indian wholesale prices fell 2.06 percent year-on-year in February,2015, following a 0.39 percentage drop iin the previous month as petrol prices declined while food cost slowed. The figure came far below market forecasts and is the deepest decline since November of 1976.

Year-on-year, petrol prices fell 21.35 percent, following a 17.08 percent drop in the previous month and cost of diesel decreased by 16.62 percent, following a 10.41 percent fall in January.Food prices rose 7.74 percent, slowing from an 8.0 percent increase in January. Among food prices, onion recorded the highest increase (26.58 percent), followed by fruits (16.84 percent), vegetables (+15.54 percent), pulses (+14.59 percent), milk (+7.33 percent) and rice (+3.80 percent). In contrast, prices fell for fibres (-22.85 percent), non-food articles (-5.55 percent), potato (-3.56 percent), and wheat (-1.63 percent).In February, cost of manufactured products edged up 0.33 percent, slowing from a 1.05 percent increase in the previous month.On a monthly basis, wholesale prices declined 1.4 percent, following a 0.8 percent drop in January.

Published on 14/5/2015India WPI Deflation worsens in April as the Indian wholesale prices fell 2.65 percent year-on-year in April,2015, following a 2.33 percent drop in the previous month, as petrol prices decline further while food cost slowed. The index has been in the negative since November 2014.

Published on 15/4/2015India WPI Deflation deepens in March as the Indian wholesale prices fell 2.33 percent year-on-year in March, 2015, following a 2.06 percent drop in the previous month, as petrol prices declined while food cost slowed. The figure came far below market forecasts and is the deepest decline since November, 1976. In march 2014, India wholesale prices accelerated to an annual 5.7 percent on higher food, fuel and manufacturing cost.

Tradingeconomics.com

Foreign Direct InvestmentForeign direct investment in India decreased to 2706 USD Million in March of 2015 from 3793 USD million in February, 2015. Foreign Diret Investment in India averaged 1063.34 USD Millions from 1995 until 2015, reaching an all time high of 5670 USD millions in February , 2008 and a record low of -60 USD millions in February, 2014. FDI in India is reported by Reserve Bank of India.

Source : www.TradingEconomics.Com/ Reserve Bank of India

Relationship between food commodities and real estate

Housing Index in India increased to 238 Index Points in the third quarter of 2014 from 233 Index points in the second quarter of 2014. Housing Index in India averaged 211.21 Index Points from 2011 until 2014, reaching an all time high of 238 Index Points in the third quarter of 2014 and a record low of 181 Index points in the second quarter of 2011. Housing Index in India is reported by the National Housing Bank, India.

India Infrastructure OutputConstruction output in India decreased 0.42 percentage in April of 2015 over the same month in the previous year. Construction Output in India averaged 5.21 percentage from 2005 until 2015, reaching an all time high of 11.66 percentage in January of 2010 and record low of -0.42 percent in April of 2015. Construction Output in India is reported by the Office of the Economic Adviser to the Government of India.