After a disastrous 2008, calendar 2009 has been quite a relief for investors and

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traders with asset classes across the board staging a smart recovery. Stock markets the world over have recovered most of what they lost in 2008, while precious metals like gold and silver also rallied. The benchmark Sensex of the Bombay Stock Exchange gained 68.8 per cent from 9,903.46 as on January 1, to close Friday at 16,719.83 points. In the same period, the yellow metal rallied from $879.45 per ounce to close Friday at $1,113.40 per ounce, up 26.6 per cent.

While both equities and precious metals have rendered good returns for investors, long positions taken in agricultural commodities would have helped one even beat equity market returns as prices of certain commodities rose much more since the beginning of the year.

Likewise, calendar 2009 has been a good year for farmers and also those who invested or took positions in agricultural commodities, thanks to a drop in production owing to a draught.

While the price of potatoes has nearly trebled from Rs 585 per quintal to Rs 1,418.75 since January 1, those of guar gam, guar seed and sugar have also made fairly decent stride upward.

"Overall, it has been a good year for those associated with agricultural commodities. Production was low across commodities due to the drought. Farmers have made good money on some commodities like guar. However, in the past 15 days or so we are seeing some correction in prices," said Naveen Mathur, head of commodities, Angel Broking.

While a deficient monsoon coupled with erratic distribution of rains across the country affected kharif harvest, the situation was aggravated by floods in Andhra Pradesh and Karnataka.

Consequently, a major shortfall was noticed in the area sown. "...around 54 lakh hectares under rice, 3.5 lakh hectares under coarse cereals, 16.5 lakh hectares under oil seeds," National Commodity and Derivatives Exchange (NCDEX) said in a research report last month.

Preliminary estimates suggested that compared with last year, production of kharif rice and oilseeds may decline significantly.

Most of the shortfall is likely to occur in the states of Uttar Pradesh, Rajasthan, Andhra Pradesh, Jharkhand, Bihar, Karnataka and Madhya Pradesh, according to the report.

"...first advance estimates indicate a shortfall of around 15 million tonnes in rice, 5.5 million tonnes in coarse cereals, 21 million tonnes in food grains and 2.5 million tonnes in oilseeds during Kharif 2009-10 compared with their estimated production last year," it said.

As a result, prices of agricultural commodities have shot up during the year at a rapid pace. For example, while potato prices rose a whopping 142 per cent from Rs 585.50 per quintal to Rs 1,418.75, that of guar seed rose from Rs 1,475.50 to Rs 2,638.35, according to the data available on the NCDEX website.

Prices of jeera rose 34.4 per cent from Rs 10,715.50 to Rs 1,4413.35, guar gam prices shot up by 68.2 per cent from Rs 3,381.10 to Rs 5,688.25 per quintal.

While sugar prices rose by 28.6 per cent from Rs 1,859.20 to Rs 2,392.70, those of pepper grew by 34.46 per cent from Rs 10,712.65 to Rs 14,404.40 per quintal.