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Futures Trade
Futures Trading in Agricultural Products
The Commodity Futures Market in India has grown at phenomenal pace from Rs 66,531 crore in 2002-03 to 21,34,471 crore in 2005-06. It further grew to 36,76,927 crore by the end of 2006-07. The volume of turnover during the first 8 months of 2007-08 stood at 24,38,389 crore. Although 77 commodities are listed in the Multi Commodity Exchanges and 48 commodities in the National Commodities and Derivative Exchange, trading is significant in about 12-15 commodities. The turnover has been highest in gold and silver which account for about 36% of the value in 2005-06. Agricultural products have added more volume only in the last two years. Still the proportion of turnover of agricultural products is low. While gold and silver accounted for 19.44%, and 16.20% of the value of the turnover, other commodities including guar seed (15.48%) Chana (10.04%) Urad (9.22%) crude oil (8.47%) soya oil, tur, mentha oil and guar Gum together account for 60.58% of the turnover in 2005-06. All other products together accounted for only 10.36% of the turnover. This includes all agricultural commodities traded in commodity exchanges, which are of interest to Kerala.
There are three national exchanges and 21 regional exchanges in India. These exchanges deal in different combination of commodities. The commodities traded by the most important 9 exchanges are listed in the following statement.
Name of the Commodity Exchange |
Commodities traded * |
Volume of turnover |
1. Multi Commodity Exchange of India Ltd, Mumbai (MCX) |
(77 commodities) Gold & silver |
9.6 |
2. National Commodity and Derivatives Exchange Ltd, Mumbai (NCDEX) |
(48 commodities) Gold & silver, crude & RBD palm oil, rubber, pepper, turmeric, rice, cashew, coffee |
10.46 |
3. The National Multi Commodity Exchange of India Ltd, Ahamedabad (NMCE) |
(42 commodities) Gold & silver. copra/coconut its oil & oil cake. |
0.18 |
4. National Board of Trade, Indore |
Mustard seed, RBD/crude palm oil/palmolein |
0.54 |
5. The Ahammedabad Commodity Exchange Ltd, Ahammedabad |
Castor seed, cotton seed, oil & oil cake |
0.06 |
6. The Rajkot Seeds, Oil & Bullion Merchants Association Ltd, Rajkot |
Castorseed, Groundnut, its oil & oil cake, cotton, cotton seed, its-oil & cake RBD palmolein |
0.03 |
7. The Chamber of Commerce, Hapur |
Gur & mustard seed |
0.08 |
8. Vijay Beopar Chamber Ltd, Muzzafarnagar |
Gur & mustard seed |
0.04 |
9. Surendranagar Cotton Oil and Oil Seeds Association, Surendranagar |
Kapas, Cotton, Cotton seed |
0.27 |
10. Others |
|
0.07 |
11. Total |
|
21.34 |
The others category include 15 Regional Exchanges which include 2 local exchanges in Kerala. The first is the India Pepper and Spices Trade Association (IPSTA) located in Kochi, which trades in Pepper and Spices. This was an old exchange dealing in pepper and the emergence of national exchanges such as MCX and NMCE and NCDEX affected its trade turnover in recent years. The second is the First Commodity Exchange of India Ltd, Kochi. which trades in coconut oil, copra and its cake and rubber.
There is a proposal for the Fourth Exchange from India Bulls Financial Services Ltd in collaboration with the public sector firm MMTC. However, the Foreward Markets Commission (FMC) which is the market regulation of the commodity exchanges is favouring the idea of the new exchange by the regional exchanges joining together. This is expected to provide them larger trading volumes and a single window clearance for final settlement of contracts.
Last Updated :04-01-2008
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