Arif Habib Commodities conducts Short-Term to 30 Year Forecasts on Gold, Silver, Platinum, Copper, Crude Oil, Natural Gas, Palm Oil, Soybean, Wheat, Ethanol, Cotton, Cocoa, Sugar, Lumber, Coffee, Tea, Chemical, Fertilizers, Coal and other soft commodities.

  • Gold
  • Crude Oil
  • Silver
  • Platinum
  • Copper
  • Natural Gas
  • Ethanol
  • Palm Oil
  • Soya Bean
  • Wheat
  • Tea
  • Coal
  • Fertilizer
  • Cotton
  • HRC Steel
  • DAP
  • Urea
  • Sugar


At Arif Habib Commodities, we believe that gold is the second best investment of the decade, with silver being the first, for many reasons.

For centuries, buying gold has been recognized as one of the best ways to preserve one's wealth and purchasing power. Gold is a unique investment, one that has served mankind well for thousands of years. From the times of ancient Egyptians, Greeks and Romans to more modern times, man has been fascinated with the beauty and magic of gold, and with its power to change men's lives.

Gold bullion is real, honest money and, many say, the best form of money the world has ever known. It is a store of value and a safe haven in times of crisis. Gold is rare, durable and does not wear out in the manner of lesser metals (or paper!) when passed from hand to hand. A small amount, easily carried, can purchase a significant amount of goods and services. It is universally accepted, and can be easily bought and sold around the world.

"We have gold because we cannot trust Governments." President Herbert Hoover

The symbol of kings and the treasure of nations, desired by all but possessed by few, gold has been cherished for all of recorded history. In the fifth century B.C., Aristotle pondered the question of the perfect medium for money. He concluded that gold is perfect money for five reasons:

  1. Durability:  Gold will not rot, break, crumble, decay, corrode or tarnish. Gold is unaffected by air, water, and even most acids.
  2. Convenience and portability:  A lifetime of wealth will fit in your pocket.
  3. Divisibility:  Gold can easily be divided into smaller amounts. An ounce of gold can be split 100 or even 1000 times.
  4. Consistency:  One ounce of pure gold is exactly the same as any other ounce, enabling worldwide trade and liquidity of gold - unlike unique items of jewelry or artwork.
  5. Demand:  Gold has a staggering variety of uses, even more today than in Aristotle's time. Its unique properties keep the demand high and the relative scarcity of the metal insures continued value.

Gold is still perfect money, perhaps more perfect money than money. Gold remains the time-honored standard of wealth that no other currency can match.

Gold Uses

Gold is an ancient metal of wealth, commerce and beauty, but it also has a number of unique properties that make it invaluable to industry. These properties include:

  • Resistance to corrosion
  • Electrical conductivity
  • Ductility and malleability
  • Infrared (heat) reflectivity
  • Thermal conductivity

Gold's superior electrical conductivity, malleability, and resistance to corrosion have made it vital to the manufacture of components used in a wide range of electronic products and equipment, including computers, telephones, cellular phones, and home appliances.

Gold has extraordinarily high reflective powers that are relied upon in the shielding that protects spacecrafts and satellites from solar radiation and in industrial and medical lasers that use gold-coated reflectors to focus light energy. And because gold is biologically inactive, it has become a vital tool for medical research and is even used in the direct treatment of arthritis and other intractable diseases.

The demand for gold in industry is steady and growing. The supply of gold from stored inventory and from mining operations is limited and will remain so. Demand from investors who want to posses this precious metal is steady, and increases during periods of world crises or instability. The result is a market with much more upside potential than down.

Gold is an excellent hedge against inflation, and protects earnings for the future. Modern investors can invest in gold the traditional way - by purchasing gold bullion in the form of bars or coins.

Crude Oil

Crude Oil is the key indicator of demand in the economy. Therefore, in the long term, an increase in global demand for the commodity is likely to drive up fuel prices. Thus traders perceive high economic growth to lead to higher demand and therefore higher prices for Crude Oil. An economic recession is more likely to have the opposite effect.

Oil futures can be extremely lucrative investments. Some investors have been able to make tens of thousands of dollars with a single trade, while investing much less than would be necessary in the stock exchange. The price of oil can change substantially in a short period of time, so futures investors can see a sudden appreciation in their investment. In periods when the price of oil skyrockets, everyone would love to be able to purchase it at a lower price. Anyone who holds a future that allows them to do so is going to be in a good position.

Oil futures are one of the most liquid investments because of the high volume that is traded every day. In fact, they are the most actively traded future on the market and hence the most liquid.

You can purchase oil futures on margin (in other words, you can borrow money to purchase them).

Oil is an irreplaceable resource. The fact that there is a finite supply is depressing for most people, but it can work to the advantage of investors who choose to invest in its futures. Other commodities futures such as corn and livestock can be replaced and their prices can be stabilized. However, as the world’s oil supply is exhausted, the price of oil will inevitably increase.

Although it is a good idea to work with a broker or trader who can show you the ropes of futures investing, it is relatively easy to get started. Anyone who takes a little time to research the process can figure it out and develop a trading strategy.


In recent years, few investments have shined like silver. In 2010, silver prices rose by an astounding 84%, and are currently at 31-year highs. The silver/gold ratio has fallen from 70 just two short years ago to 50 today, illustrating the increasing value of silver relative to gold.

The reasons to invest in silver are solid. Like two sides of a coin, silver demand is driven by investors and industry. As a safe haven asset and store of value, silver preserves and protects wealth in times of economic distress. As an industrial metal, silver is indispensible.

Silver can be found in an ever expanding array of products such as televisions, computers, and smart-phones. As income levels continue to rise in the emerging economies of China, India, and Brazil, an increasing number of consumers are beginning to demand these products as well as view silver as an investment.

Trading silver has historically been considered as an alternative to gold trading, as silver is the least expensive of the precious metals. This created a volatile and often profitable market as lower prices allowed for many traders to invest. Nowadays, trading silver futures is considered good portfolio diversification and allows for investment to be made with relatively little capital, thanks to the leverage provided by brokerage firms.


Platinum is scarce even among the precious metals and has tended to be more expensive than gold. It is a member of Platinum Group of Metals and is about 30 times rarer then gold. Around 90% of the Platinum supplies come from South Africa’s Bushweld complex, and deposits near Norilsk, Russia, followed by the Sudbury Basin, Canada.

The reason why platinum is today the most valuable of precious metals is because it has unique characteristics and is required in many industrial applications. It is estimated that one-fifth of everything we use either contains platinum or requires platinum in its manufacture, i.e. it plays an essential part in the production of about 20% of the consumer goods. Among all the known modern uses of platinum, most of the annual production is consumed by two dominant categories - catalytic converters (part of the exhaust system in the automobile) and fine jewelry. Together, these two applications consume more than 70% of the world's supply of platinum.

As much of the demand of Platinum stems from the automobile industry, any change or downturn in it can cause significant impact on Platinum’s prices. During the financial meltdown during 2008, Platinum prices fell 65% from their peak, driven downward in part by faltering car sales worldwide. In addition to it, Platinum experienced a surplus that continued on into 2009. Since 2009, Platinum gained strength and prices had seen a rising trend, and investors returned to the metal, seeking a safe haven, holdings of ETF Securities's Physical Platinum rose 87% over the first quarter of the year. The prices have remained volatile during 2011. In the beginning of 2012, platinum prices overtook gold prices, allowing the two metals to return to their traditional relationship. The increase in prices is generally attributed to improving economic conditions and supply concerns.

Because of Platinum’s stronger price moves and prospects for a higher upside, it is known as “high octane gold”. Platinum investment can be in Physical metal itself (Platinum coins, bars or wafers), as well as through non physical means (Platinum Stocks, Mutual Funds, Exchange Traded Funds, Futures, Options), which provide a liquid, convenient, and reliable way to invest. Investment demand for Platinum around the globe is rising, and in rising markets, it normally develops a significant premium over gold.


Copper is one of the basic chemical elements. In its nearly pure state, copper is a reddish-orange metal known for its high thermal and electrical conductivity. It is commonly used to produce a wide variety of products, including electrical wire, cooking pots and pans, pipes and tubes, automobile radiators, and many others. Copper is also used as a pigment and preservative for paper, paint, textiles, and wood. It is combined with zinc to produce brass and with tin to produce bronze.

The copper industry’s growth and prosperity are based upon the metal’s inherent properties such as attractive appearance, high conductivity, good corrosion resistance and alloy with other metals. One third of the copper produced is used in electronic appliances such as power cables including wiring and water tubing. Transport industry is also heavily dependent on copper, using roughly one eighth of the copper produced. The copper demand over the years has increased furiously with the increase in the global demand especially on construction and infrastructure, and with spending on automobiles and consumer durables. Copper demand has increased from 3.7 million tonnes in 1960 to 6.8 million tonnes in 1970, 9 million tonnes in 1980, 10.9 million tonnes in 1990, 15.1 million tonnes in 2000, and 16.5 million tonnes in 2005.China is the largest consumer of copper followed by India, countries of EU, United States and Japan.

Copper is priced on terminal markets, mainly the London Metal Exchange, and prices fluctuate with changes in the balance between supply and demand and with general economic and financial conditions. Whereas demand is cyclical, supply tends to be relatively inelastic as mines need to spread heavy fixed costs over as high an output as possible. The industry is a modest employer of labor, but is capital intensive at both the mining and refining stages. Volatile prices can be hedged in forward markets, but nonetheless create problems for producers and consumers alike.

Natural Gas

As we see that the world is continuously struggling to find new energy resources, it is evident that fossil fuels will play a significant role in the future. Natural gas is found in more abundance than oil and is the fastest growing hydrocarbon with average growth to be estimated around 1.5% to 2%. Most oil economists put the Natural gas reserves at least 50% higher than Oil reserves at the current consumption rates. At present, Natural gas reserves are estimated to last in excess of 60 yrs whereas Oil reserves are estimated at 40 odd years.

The uses of Natural gas are widespread. An environmentally friendly and efficient energy source, natural gas is the cleanest-burning conventional fuel, producing lower levels of greenhouse gas emissions than heavier hydrocarbon fuels such as coal and oil. It also works as a powerful domestic fuel, used in cooking, heating, boilers, furnaces, and water heaters. As a major source of electricity generation, it burns more cleanly than other Hydrocarbon fuels and produces less carbon dioxide per unit of energy released. Compressed natural gas is a cleaner alternative to other automobile fuels such as petrol and diesel. Natural gas is a major feedstock for the production of ammonia for use in fertilizer production.

Natural gas investing is an incredibly popular and active sector of the commodity world, as its high volatility as well as robust growth predictions makes it important for all kinds of investors. As a trading tool, natural gas tends to exhibit violent daily swings with high and liquid volumes. In addition, because of increased dependence and being considered as the future renewable source of energy, natural has become an attractive investment opportunity. The International Energy Agency predicts that the demand for natural gas will grow by approximately 44 percent through 2035.

Investing in natural gas is advantageous because one gets tax incentives along with a tax write off which someone doesn't get while investing in different bonds, stocks and other kinds of investment. Hence, investor is always on safer side. The investment options include Exchange Traded Funds, Stocks, Futures, Mutual Funds and Automobile Industries.


Ethanol, also called ethyl alcohol, pure alcohol, grain alcohol, or drinking alcohol, is a volatile, flammable, colorless liquid. It is a psychoactive drug and one of the oldest recreational drugs. Best known as the type of alcohol found in alcoholic beverages, it is also used in thermometers, as a solvent, and as a fuel. In common usage, it is often referred to simply as alcohol or spirits.

The largest single use of ethanol is as a motor fuel and fuel additive. More than any other major country, Brazil relies on ethanol as a motor fuel. Gasoline sold in Brazil contains at least 25% anhydrous ethanol. Ethanol is the principal psychoactive constituent in alcoholic beverages, with depressant effects on the central nervous system. It has a complex mode of action and affects multiple systems in the brain. Alcoholic beverages vary considerably in ethanol content and in foodstuffs they are produced from. Most alcoholic beverages can be broadly classified as fermented beverages. Ethanol is an important industrial ingredient and has widespread use as a base chemical for other organic compounds. These include ethyl halides, ethyl esters, diethyl ether, acetic acid, ethyl amines, and to a lesser extent butadiene. Ethanol is used in medical wipes and in most common antibacterial hand sanitizer gels at a concentration of about 62% v/v as an antiseptic. Ethanol kills organisms by denaturing their proteins and dissolving their lipids and is effective against most bacteria and fungi, and many viruses, but is ineffective against bacterial spores. Before the development of modern medicines, ethanol was used for a variety of medical purposes. It has been known to be used as a truth drug (as hinted at by the maxim "in vino veritas"), as medicine for depression and as an anesthetic.

Palm Oil

Palm oil is edible plant oil derived from the mesocarp of the fruit of the oil palm. Palm oil is a common cooking ingredient in the tropical belt of Africa, Southeast Asia and parts of Brazil. Its increasing use in the commercial food industry in other parts of the world is buoyed by its lower cost and the high oxidative stability (saturation) of the refined product when used for frying.

The use of palm oil in food products attracts the concern of environmental activist groups: the high oil yield of the trees has led, in parts of Indonesia, to removal of forest in order to make space for oil-palm monoculture: this has resulted in acreage losses of the natural habitat of the orangutan.

Palm oil and palm kernel oil were jointly the largest contributor, accounting for 48 million tonnes or 30% of the total output. About 38% of the oils and fats produced in the world were shipped across oceans. Of the 60.3 million tonnes of oils and fats exported around the world, palm oil and palm kernel oil make up close to 60%; Malaysia, with 45% of the market share, dominates the palm oil trade.

Soya Bean

The soybean (U.S.) or soya bean (UK) (Glycine max) is a species of legume native to East Asia, widely grown for its edible bean which has numerous uses. The plant is classed as an oilseed rather than a pulse by the Food and Agricultural Organization (FAO).

Fat-free (defatted) soybean meal is a significant and cheap source of protein for animal feeds and many prepackaged meals, soy vegetable oil is another product of processing the soybean crop. For example, soybean products such as textured vegetable protein (TVP) are ingredients in many meat and dairy analogues. Soybeans produce significantly more protein per acre than most other uses of land. The main producers of soy are the United States (35%), Brazil (27%), Argentina (19%), China (6%) and India (4%).

Mainly soya bean is used in cooking oil and vegetable oil. Soybean meal is the material remaining after solvent extraction of oil from soybean flakes, Soybean meal is an essential element of the American production method of growing farm animals. Soy flour refers to defatted soybeans ground finely enough to pass through a 100-mesh or smaller screen where special care was taken during desolventizing (not toasted) to minimize denaturation of the protein to retain a high Protein Dispersibility Index (PDI), for uses such as extruder cooking of textured vegetable protein. It is the starting material for production of soy concentrate and soy protein isolate.


Wheat is a cereal grain, originally from the Levant region of the Near East and Ethiopian Highlands, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize (784 million tons) and rice (651 million tons). In 2009, world production of wheat was 682 million tons, making it the second most-produced cereal after maize (817 million tons), and with rice as close third (679 million tons).

Wheat is grown on more land area than any other commercial crop and is the most important staple food for humans. World trade in wheat is greater than for all other crops combined. Globally, wheat is the leading source of vegetable protein in human food, having higher protein content than either maize (corn) or rice, the other major cereals. In terms of total production tonnages used for food, it is currently second to rice as the main human food crop and ahead of maize, after allowing for maize's more extensive use in animal feeds.

Wheat was a key factor enabling the emergence of city-based societies at the start of civilization because it was one of the first crops that could be easily cultivated on a large scale, and had the additional advantage of yielding a harvest that provides long-term storage of food. Wheat grain is a staple food used to make flour for leavened, flat and steamed breads, biscuits, cookies, cakes, breakfast cereal, pasta, noodles, couscous and for fermentation to make beer, other alcoholic beverages, or bio fuel.

Wheat is planted to a limited extent as a forage crop for livestock, and its straw can be used as a construction material for roofing. The whole grain can be milled to leave just the endosperm for white flour. The by-products of this are bran and germ. The whole grain is a concentrated source of vitamins, minerals, and protein, while the refined grain is mostly starch.


Tea is an aromatic beverage prepared by pouring boiling hot water over cured leaves of the Camellia sinensis plant . The term also refers to the plant itself. After water, tea is the most widely consumed beverage in the world. It has a cooling, slightly bitter, sharp flavour which many people enjoy.

Consumption of tea (especially green) is beneficial to health. Consumption of green tea is associated with a lower risk of diseases that cause functional disability, such as “stroke, cognitive impairment, and osteoporosis” in the elderly.

Tea contains L-theanine, and its consumption is strongly associated with a calm but alert and focused, relatively productive (alpha wave dominant), mental state in humans. This mental state is also common to meditative practice.

The phrase herbal tea usually refers to infusions of fruit or herbs made without the tea plant, such as rosehip tea or chamomile tea. Alternative phrases for this are tisane or herbal infusion, both bearing an implied contrast with "tea" as it is construed here.

Tea is the most popular manufactured drink in the world in terms of consumption. Its consumption equals all other manufactured drinks in the world – including coffee, chocolate, soft drinks, and alcohol – put together. Most tea consumed outside East Asia is produced on large plantations in the hilly regions of India and Sri Lanka, and is destined to be sold to large businesses. India is the world's largest tea-drinking nation although the per capita consumption of tea remains a modest 750 grams per person every year. Turkey, with 2.5 kg of tea consumed per person per year, is the world's greatest per capita consumer. In 2003, world tea production was 3.21 million tonnes annually. In 2008, world tea production reached over 4.73 million tonnes. The largest producers of tea are the People's Republic of China, India, Kenya, Sri Lanka, and Turkey.


Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure. Coal is composed primarily of carbon along with variable quantities of other elements, chiefly hydrogen, sulfur, oxygen, and nitrogen.

Throughout history, coal has been a useful resource for human consumption. It is primarily burned for the production of electricity and/or heat, and is also used for industrial purposes such as refining metals. A fossil fuel, coal forms when dead plant matter is converted into peat, which in turn is converted into lignite, then anthracite. This involves biological and geological processes that take place over a long period of time.

Coal is the largest source of energy for the generation of electricity worldwide, as well as one of the largest worldwide anthropogenic sources of carbon dioxide releases. Gross carbon dioxide emissions from coal usage are slightly more than those from petroleum and about double the amount from natural gas. Coal is extracted from the ground by mining, either underground by shaft mining through the seams or in open pits.

Top coal producers in 2010 (2009), metric tons, were: China 3,162 (2,971), United States 997 (985), India 571 (571), Australia 420 (399), Indonesia 336 (301), Russia 324 (297), South Africa 255 (247), Poland 134 (135), Kazakhstan 111 (101), and Colombia 74 (73).

The price of coal increased from around $30.00 per short ton in 2000 to around $150.00 per short ton as of September 2008. As of October 2008, the price per short ton had declined to $111.50. Prices further declined to $71.25 as of October 2010.


Fertilizer (or fertiliser) is any organic or inorganic material of natural or synthetic origin (other than liming materials) that is added to a soil to supply one or more plant nutrients essential to the growth of plants. A recent assessment found that about 40 to 60% of crop yields are attributable to commercial fertilizer use. They are essential for high-yield harvest: European fertilizer market is expected to grow to €15.3 billion by 2018.

Mined inorganic fertilizers have been used for many centuries, whereas chemically synthesized inorganic fertilizers were only widely developed during the industrial revolution. Increased understanding and use of fertilizers were important parts of the pre-industrial British Agricultural Revolution and the industrial Green Revolution of the 20th century.

Inorganic fertilizer use has also significantly supported global population growth — it has been estimated that almost half the people on the Earth are currently fed as a result of synthetic nitrogen fertilizer use.

Fertilizers typically provide, in varying proportions:

  • Six macronutrients: nitrogen (N), phosphorus (P), potassium (K), calcium (Ca), magnesium (Mg), and sulfur (S);
  • Seven micronutrients: boron (B), chlorine (Cl), copper (Cu), iron (Fe), manganese (Mn), molybdenum (Mo), and zinc (Zn)

The macronutrients are consumed in larger quantities and are present in plant tissue in quantities from 0.15% to 6.0% on a dry matter (0% moisture) basis (DM). Micronutrients are consumed in smaller quantities and are present in plant tissue on the order of parts per million (ppm).

Only three other macronutrients are required by all plants: carbon, hydrogen, and oxygen. These nutrients are supplied by water and carbon dioxide.

The nitrogen-rich fertilizer ammonium nitrate is also used as an oxidizing agent in improvised explosive devices, sometimes called fertilizer bombs, leading to sale regulations.

Excessive nitrogen fertilizer applications can also lead to pest problems by increasing the birth rate, longevity and overall fitness of certain agricultural pests.


Pakistan is the world’s 4th largest producer and 3rd largest consumer of cotton. It is because of being the leading producer of cotton that Pakistan has been able to develop its textile industry and move towards industrialization. The contribution of textile sector, as a whole, towards Pakistan’s GDP is 8.5% and the sector employs about 15 million people, which is 30% of the country’s total workforce.

To most of the people, cotton is the part of daily lives. Its uses extend from cotton spinning, textile products, including towels, terrycloth, robes, cotton cloth, cotton yarn, denim (for blue jeans), socks, T shirts, bed sheets, other readymade garments etc. to fishing nets, coffee filters, tents, explosive manufactures, bookbinding and gunpowder.

Supply and demand for cotton can be impacted by a number of factors, ranging from extreme weather to the use of substitutes among consumers. Cotton prices are mainly driven by the factors such as Acreage Allotments, which is the percentage of usable land allocated to cotton growing. Weather pattern in production region is another factor which determines the supplies and prices, for example heavy rains can delay harvests. Strength and weakness of dollar also impacts cotton prices. A weak dollar generally boosts the cotton price, since this makes the commodity cheaper to consumers around the world. Other factors on which cotton prices depend include overall economic health and cotton alternatives.

Cotton prices have seen rising trends since 2009 continuously and into 2012 as well. During 2011, the devastation due to floods, along with other factors caused the prices to surge from Rs. 1500 to Rs. 2000, by all means extra-ordinary, which may restrict demand. Further, cotton prices during April 2012 witnessed an increase 0f Rs 200 per mound to reach Rs 6,400 per mound in Punjab and Rs 6,200 per mound in Sind. This increase was attributed to the increase in export orders.

It was after the price surge in 2009 that investors began making cotton a part of their investment portfolio. This soft commodity has the potential to deliver big gains and add diversification benefits, although there is some risk involved too. The three widely ways to invest in cotton include Exchange Traded Funds, Futures and Stocks.

HRC Steel

Steel futures are essentially a price risk management tool. World steel prices - just as prices for other commodities such as copper or crude oil - are known to be very volatile; and the steel price cycle is well documented.

A common and widely traded steel product used to produce cold-rolled and coated steel coil and sheet for automotive body and similar applications and white goods; as well as for the production of welded steel tube. The price fluctuations during the last six years in the hot rolled coil (HRC) price have taken world export f.o.b. prices from between $400 to $1000 per metric tonne.

In commodity market terminology, HRC Steel refers to a futures contract traded on the New York Mercantile Exchange or NYMEX for Hot Rolled Coil steel delivered in the Mid-Western United States. HRC Steel is used in critical engineering applications and pipe-making, as well as in the automotive industry and elsewhere.


Diammonium phosphate (DAP) is one of a series of water-soluble ammonium phosphate salts which can be produced when ammonia reacts with phosphoric acid.

DAP is used as a fertilizer. When applied as plant food, it temporarily increases the soil pH, but over a long term the treated ground becomes more acidic than before upon nitrification of the ammonium. It is incompatible with alkaline chemicals because its ammonium ion is more likely to convert to ammonia in a high-pH environment.

DAP can be used as a fire retardant. It lowers the combustion temperature of the material, decreases maximum weight loss rates, and causes an increase in the production of residue or char. These are important effects in fighting wildfires as lowering the pyrolysis temperature and increasing the amount of char formed reduces that amount of available fuel and can lead to the formation of a firebreak. It is the largest component of some popular commercial firefighting products.

DAP is also used as a yeast nutrient in winemaking and brewing; as an additive in some brands of cigarettes purportedly as a nicotine enhancer; to prevent afterglow in matches, in purifying sugar; as a Flux for soldering tin, copper, zinc and brass; and to control precipitation of alkali-soluble and acid-insoluble colloidal dyes on wool.


Urea serves an important role in the metabolism of nitrogen-containing compounds by animals and is the main nitrogen-containing substance in the urine of mammals. It is solid, colourless, and odorless (although the ammonia that it gives off in the presence of water, including water vapor in the air, has a strong odor). It is highly soluble in water and practically non-toxic. Dissolved in water, it is neither acidic nor alkaline. The body uses it in many processes, the most notable one being nitrogen excretion. Urea is widely used in fertilizers as a convenient source of nitrogen. Urea is also an important raw material for the chemical industry.

The terms urea is also used for a class of chemical compounds sharing the same functional group RR'N—CO—NRR', namely a carbonyl group attached to two organic amine residues. Ureas are closely related to biurets and related in structure to amides, carbamates, carbodiimides, and thiocarbamides.

Urea can be irritating to skin, eyes, and the respiratory tract. Repeated or prolonged contact with urea in fertilizer form on the skin may cause dermatitis.

High concentrations in the blood can be damaging. Ingestion of low concentrations of urea, such as are found in typical human urine, is not dangerous with additional water ingestion within a reasonable time-frame. Many animals (e.g., dogs) have a much more concentrated urine and it contains a higher urea amount than normal human urine; this can prove dangerous as a source of liquids for consumption in a life-threatening situation (such as in a desert).

The substance decomposes on heating above melting point, producing toxic gases, and reacts violently with strong oxidants, nitrites, inorganic chlorides, causing fire and explosion.


Since long, sugar has been used as a sweetener in almost all cuisines. The uses of sugar vary from domestic uses to the commercial which include its utility in beverages, retail, confectionery, bakery products, preserved foods and dairy products. The world’s sugar production comes from three of the world’s biggest emerging countries such as Brazil, China and India. It is also the second most important cash crop in Pakistan after cotton. The major sugar crop is sugarcane, but there is a small sugar beet industry in the cooler high elevations of the Northwest Frontier Province.

Sugar has become a popular investment among investors, as significant volatility in spot prices creates opportunities to capture material returns over a relatively short period of time. While sugar may seem like a strange investment, it is an international commodity just like crude oil and natural gas, and is available to almost every investor easily.

The prices of sugar have seen relative growth and volatility during the past years, ranging between $0.20 and $0.30 per pound. There are several factors on which the sugar prices depend. As most of the sugar production comes from a few big economies, political disruption which can have an impact on the supplies and eventually on the prices. Further, extreme weather conditions in the sugar producing countries can influence the commodity price of sugar all over the globe. For instance, the price surge in 2009 was due to the dry monsoon season in India that affected crops. Another factor is regulatory environment, for example the government support in the form of imposition of quotas that restrict the amount of tariff-free sugar that many major users can import. Moreover, relative commodity prices can also have an impact on the prices in a way that farm area that is used to grow sugar cane can be used to harvest other crops which yield higher returns.

Investing in sugar can take many forms, such buying stocks in a food company, an ethanol producer that uses sugar, the commodities and derivative markets. The most common and widely used method is by Exchange Traded Funds (ETFs) which offers easy access, diversion and exposure to the investors.