In 2011, stock markets failed to shine and gold lost a bit of its lustre, though the latter ended with a 31 per cent gain. So, which was the commodity that gave the best returns last year?
At the beginning of last year, no one could have given it even a semblance of a chance. The winner then is guar gum, a by-product of guarseed derived from guar or cluster beans.
Prices of guar gum increased over two-and-a-half times in 2011 and Rs 100 invested in the product on January 1 last year would have fetched an additional Rs 254.60 on December 31. Smart investors would have got Rs 22 more had they sold on December 28.
Between January 2 and December 31, its price increased to Rs 22,568.45 a quintal from Rs 6,364.30.
Guar gum is extracted from guarseed and is used as an emulsifier or thickener in a wide range of food products. Industries such as textiles and printing use it for its thickening properties, while oil drilling companies use it for exploration purposes.
Guar gum's golden run was aided last year mainly by export demand from oil drilling companies.
The Forward Markets Commission, which supervises the functioning of the futures market in the country, imposed special margin on the product but still it continued its splendid rally.
In the year ahead, Angel Broking Ltd sees the demand continuing in view of a lower production of 11.3 lakh tonnes this season beginning October compared with 15 lakh tonnes last season.
A lower carryover stock also aided the trend.
Guarseed, the only source of guar gum, also gained in tandem. It gave a return of Rs 190 for Rs 100 with its price increasing to Rs 6,789.45 from Rs 2,334.30.
Pepper does well
Pepper really turned hot last year and was the third best performer.
It gave a return of Rs 50 for every Rs 100 invested as its price increased to Rs 33,421.05 a quintal from Rs 22,192.85. Lower production and higher export demand buoyed the counter.
Furnace oil and heating oil were the next best, while gold, which increased 31.23 per cent, was only tenth among the top performers.
The laggards
Turmeric, which ruled the roost in the commodity market since the second half of 2009, turned out to be the worst performer.
An investment of Rs 100 in the spice would have resulted in a loss of nearly Rs 70, while cotton, another star performer until April 2011, ended up 35 per cent lower.
Raw jute, too, performed badly, losing over 31 per cent in value last year.