History of Commodity Market in Nepal

Nepal is a developing country. It is situated in the north of India and south of China. It is a small country with diversity in natural resource, environment, language and other cultural activities. Most of the people are Hinduism. Kathmandu is a Capital of Nepal. The capital is most developed and expensive city in the country. All government offices, trading companies and other financial intuitions are centralized in the city. The population of the city is very and increasing day by day. Most of capable people from outside the valley want to be migrated to get the all services in the same place. The main reasons for migrating people in the valley are they are excluded for so many opportunities which are not available except Kathmandu Valley.

In the financial sector there are more new probable opportunities. There are no sufficient financial instruments for trading. Investors have to be limited in some instruments. They cannot diverse their portfolios in sufficient sectors. Due to the lack of diversification in portfolio the investors have to bear huge loss if the market turns to the opposite direction of the investor what he/she has expected and forecasted.

In the context of financial sector there one stock exchange for trading stock of listed commercial banks, development banks, financial companies, some hotels and other few manufacturing companies. In the exchange investors can trade stock, bonds, preferred stocks and other securities. Except stock market there were no other commodities markets in the country. To meet the necessity in the investment sector the concept of commodities trading and its market has been established with the establishment of Commodities and Metal Exchange Nepal Ltd. (COMEN) in Laldurbar, Kathmandu. A COMAN is the first commodity market which was established 28 Mangsir 2063 BS. With the establishment COMEN formally commodities market has been enter in Nepal before 6 year ago. A financial opportunity has been added in the financial sector of the country. Now there six commodities exchanges providing spot and future trading opportunities. They are COMEN, Mercantile Exchange, Wealth Exchange, Nepal Derivative Exchange and Commodity Future Exchange. Other more than 3 exchanges are in the process of operation.

It is just that commodities market has been enter in the financial hub of Nepal but there is not any further development in the commodities market. This is due to lack of trading strategy. Most of the investors are looser. If this wrong trend in commodity market continues the market may fall in the accident and will be declared as problematic. So it's time to think by the stakeholders itself for the betterment of trading and earning opportunities.