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Indian economy is riding high enjoying 8% growth rate and the industrial and agricultural sectors are doing well. We are also enjoying favourable foreign exchange balances. Even so, the producer or the farmer does not get his due for a host of reasons. One among them is the middlemen and mediators trying to hoodwink the producer about the reasonable price and the producer’s inability to wait for the right price for lack of infrastructural facilities.

Though there is a spot market for many commodities to secure immediate price, it always results in the producer settling for a loss. Similarly even if a farmer waits for a future’s contract to get a reasonable price, his ignorance of the market puts him in a disadvantageous position. MCX and NCDEX were formed in answer to these problems faced by the producers and farmers.

Introduction to Multi Commodity Exchange (MCX):

MCX: refers to Multi Commodity Exchange which facilitates trading in a variety of commodities in the country. This is an independent commodity exchange operating in India with its base in Mumbai. The MCX was established in the year 2003 with NABARD, NSE, Financial Technologies India Ltd, Corporation Bank, Bank of India, Bank of Baroda, HDFC Bank Ltd, SBI Life Insurance Corporation Ltd, Fid Fund (Mauritius) Ltd etc. as key share holders. MCX reaches out to 500 Indian cities with about 10000 trading terminals. MCX is the only market in India where multiple commodities are traded.

MCX is engaged in future trading in a number of commodities like agricultural commodities, Bullion, Ferrous and Non Ferrous metals, Pulses, Oil and Oil Seeds, Energy, Plantations, Spices and soft commodities. The average daily turnover of MCX is about 1.55 billion US Dollars. Multi Commodity Exchange (MCX) captures almost 72% of the market share and thus it occupies No1 position in India in the commodity market. MCX occupies no 1 position in the world in respect of silver, No 2 position in Natural gas and No 3 position in crude oil and gold.

Categorywise Multi Commodity Exchange (MCX) Index:

 

Category Commodities
Metals Aluminum, Copper, Lead, Nickel, Sponge iron, Steel Long and Steel flat, Tin, Zinc
Bullion Gold, silver
Fibre Long, medium and short staple cotton, Cotton yarn etc
Energy Crude oil, Furnace oil, Natural gas etc
Spices Cardamom, Jeera, Pepper, Red Chilly
Pulses Chana , Masoor and yellow peas
Plantation Arecanut, Cashew kernel, Coffee, Rubber
Petro chemicals HDPE, Polypropylene, PVC
Oil and Oil Seeds Castor, Coconut, Cotton Seed, Palmoline, ground nut, Mustard, Soya, Sunflower, Sesame and Rice Bran
Cereals Maize
Others Mentha oil, Potato, Sugar

 

Multi Stock Exchange (MCX) Commodities Index in detail:

 

ALMOND ELECTWK  MAIZE  SILVERHNI 
ALUMINIUM FURNACEOIL MASUR  SILVERM 
ARECAJHAJI GASOLINE MENTHAOIL  SOYABEAN 
ARECARASHI GNUTOILEXP MESCRUDOIL  SOYMEAL 
ATF GOLD MGGURCHAKU  SOYSEED 
BRCRUDEOIL GOLDGUINEA MUSTARDJPR  SPONGEIRON 
BSMATIRICE GOLDHNI MUSTARDOIL  SRBATIRICE 
CARDAMOM GOLDM MUSTRDSEED  STEELFLAT 
CASHEWKERN GRSD  NATURALGAS  STEELGZB 
CASTOROIL GUARGUM  NICKEL  STEELIGTMG 
CER GUARSEED  PEPPER  STEELLGBVN 
CFI HDPEHM  PLATINUM  STEELLONG 
CHANA HEATINGOIL  POTATO  SUGARM 
CHANADEL IGOLDAHM  POTATOTRWR  SUGARMDEL 
COCONUTCAK IGOLDDEL  PPTQ  SUGARSKLP 
COCONUTOIL IGOLDKOL  PVC  SUPARIRASI 
COFROB IGOLDMAHM  RBDPMOLEIN  TCOAL 
COPPER IGOLDMDEL  REDCHILLI  TIN 
CORIANDER IGOLDMKOL  REFSNFLOIL  TURDESI 
COTTONLONG IGOLDMMUM  REFSOYOIL  TURMERIC 
COTTONMED IGOLDMUM  RICE URAD 
COTTONSEED JEERA  RJKCASSEED  WHEAT 
CPO JUTE  RSOLAPRJUN  YELLOWPEAS 
CRDO  KAPAS  RSOLAPRMAY  ZINC 
CRUDEOIL  KAPASKHALI  RUBBER   
DRB  LEAD  SESAMESEED   
ELECTMTH  LONGCOTTON  SILVER   

 

MCX works in joint venture with National Spot Exchange, a purely agricultural Commodity Exchange for the standardization in agricultural markets. It also works in conjunction with National Bulk Handling Corporation which helps farmers in bulk handling of agricultural commodities. MCX has also set up a management course i.e ‘Diploma in Commodities Market’ in cooperation with Welingkar Institute of Management to train young managers deal efficiently in the commodities market.

Multi Commodity Exchange Of India Address Of Mumbai Branch:

Multi Commodity Exchange of India Ltd.
Exchange Square,
Suren Road, Andheri East,
Mumbai – 400093, India.
Tel: 022 6731 8888
Fax: 022 6649 4151
Email: info@mcxindia.com

National Commodities and Derivatives Exchange (NCDEX)

Introduction to NCDEX:

NCDEX: NCDEX stands for National Commodities and Derivatives Exchange Ltd. The aim of the company is to make forward contracts simple, safe and secure. NCDEX is a public limited company incorporated on 23.4.2003 under the Companies Act, promoted by national level financial institutions like ICICI Bank, LIC, NABARD, NSE, Canara Bank, CRISIL, Goldman Sachs, IFFCO and PNB with an aim to bring in standardization and professionalism in forward contract and also to bring in security to the producers. They hold equity shares in the NCDEX.

The NCDEX offers many benefits. The promoters of the company are financial institutions with long standing, experience and expertise in the field of financial dealings and contracts. So they bring in experience, trust, nation wide reach, technology and risk management skills.

The NCDEX is a national level, on line commodity exchange and its speciality is that it is a technology driven exchange market. NCDEX is located in Mumbai and has 550 centres all over the country. NCDEX trades in 57 commodities like agricultural commodities, Precious metals, Base metals, Ferrous metals, Energy, polymers etc. NCDEX offers a platform for market participants to trade in commodities and derivatives under sound global practices and on a wider canvas. Another important feature of NCDEX is its transparency.

The NCDEX website gives trend analysis and the prices of the various commodities traded on a daily basis. This provides for good knowledge of the prices for all the parties involved.

NCDEX is regulated by the Forward Markets Commission and is governed by the Forward Contracts Regulation Act, the Indian Companies Act, The Stamp Act and the Indian Contract Act.

While MCX also exists for future trading in multiple commodities, the NCDEX is an online corporate market. The NCDEX is also taking initiative to train the farmers through commodity exchanges.

 


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