Organized commodity derivatives in India started as early as 1875, barely about a decade after they started in Chicago. and, many feared that financial  derivatives fuelled unnecessary speculation and were detrimental to the healthy functioning of the markets for the underlying commodities. The study undertaken below has been outlined on the theme of the commodity markets functioning in India. The paper has been indicates, Overview of the commodity market, commodity market development, challenges faced by the commodity market and commodity market  participants.

KEYWORDS: Commodity Market; Forward Market; Market Development, Hedgers, Speculators, Arbitrageurs.