Commodity Exchange: Lakshminarayanan Alaguraja Advocate Altacit Global

CHENNAI
3rd Floor, Creative Enclave, 148-150, Luz Church Road, Mylapore, Chennai - 600 004. Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9, Raheja Towers, 26-27, M G Road, Bangalore - 560 001. Tel: +91 - 80 - 6546 2400
COMMODITY EXCHANGE
COIMBATORE
BB1, Park Avenue, # 48, Race Course Road, Coimbatore - 641018. Tel: +91 - 422 6552921
Lakshminarayanan Alaguraja Advocate Altacit Global

EMAIL
info@altacit.com
WEBSITE
www.altacit.com
What are Commodities?

CHENNAI
BANGALORE
COIMBATORE
In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Commodity Exchange
CHENNAI
BANGALORE
COIMBATORE
a commodity exchange is defined as an association, or alternatively a company, as well as any corporate body that organizes trading in commodities. Earlier the commodity exchange was more like an open market place where traders would call their bids and purchase commodities. A commodities exchange is an exchange where various commodities and derivatives products are traded. Most commodity markets across the world trade in agricultural products and other raw materials.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
cont
CHENNAI
BANGALORE
COIMBATORE
Commodities exchanges usually trade futures contracts on commodities, such as trading contracts to receive something, say corn, in a certain month. A farmer raising corn can sell a future contract on his corn, which will not be harvested for several months, and guarantee the price he will be paid when he delivers; a breakfast cereal producer buys the contract now and guarantees the price will not go up when it is delivered. This protects the farmer from price drops and the buyer from price rises.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Commodity Market
CHENNAI
BANGALORE
COIMBATORE
Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Early History
CHENNAI
BANGALORE
COIMBATORE
Commodity exchanges began in the middle of the 19th century, when businessmen began organizing market forums to make buying and selling of commodities easier. These market places provided a place for buyers and sellers to set the quality, standards, and establish rules of business.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Commodity Exchange and Stock Exchange

CHENNAI
BANGALORE
COIMBATORE
EMAIL
The basic difference between the commodity exchange and stock exchange is that while in commodity exchange nonfinancial commodities i.e. agro products such as castor, groundnut, sesame etc. and non agro products such as aluminum, zinc, nickel etc. are traded. However in a stock exchange all financial products are traded such as stocks, indexes, interest rate, government securities etc. are traded.
info@altacit.com
WEBSITE
www.altacit.com
Commodity Futures
CHENNAI
BANGALORE
Futures are standardized agreements between a buyer and a seller to exchange a pre-agreed quantity of an asset of prespecified quality:
at a specific price, and at a pre-specified future date
COIMBATORE
If the underlying asset is a commodity, the futures are called commodity futures.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Background
CHENNAI
BANGALORE
COIMBATORE
The future commodity trading has long history in India and started as early as 1857 . Due to ongoing global and domestic reforms in agriculture and allied sectors, the government is reducing its direct market intervention and encouraging private participation based on market forces This has led to increased exposure of agricultural produce to price and market risks which consequently emphasizes the importance of future markets for price discovery and price risk management. As a result, the Government of India issued notifications on April 1, 2003 and permitted futures trading in a wide range of agricultural commodities except options trading.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Regulation
CHENNAI
BANGALORE
Forward Controls (Regulation) Act, 1952

Act applicable to all trades where delivery was after more than 11 days.
COIMBATORE
Forward Markets commission regulatory body .
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Commodity exchange India

CHENNAI
BANGALORE
COIMBATORE
At present, there are 3 national level commodities exchanges namely National Multi-Commodity Exchange of India (NMCE), National Commodity and Derivatives Exchange Ltd (NCDEX) and Multi Commodity Exchange of India Ltd (MCX) and 21 regional exchanges allowed for derivatives trading of agricultural commodities. The 3 major national commodity exchanges are: National Commodity and Derivatives Exchange Limited Multi Commodity Exchange of India Ltd National Multi Commodity Exchange of India Ltd
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
National Commodity and Derivatives Exchange Limited - NCDEX:

CHENNAI
BANGALORE
COIMBATORE
This is an online multi-commodity exchange that is promoted and professionally managed by ICICI Bank Limited, Life Insurance Corporation of India, National Bank for Agriculture and Rural Development, National Stock Exchange of India Limited , Punjab National Bank, CRISIL Limited, Indian Farmers Fertiliser Cooperative Limited and Canara Bank. NCDEX, located in Mumbai, is a public limited company, which was incorporated on 23rd April 23 2003. this was done under the Companies Act, 1956. on 9th May 2003, it was given its Certificate for Commencement of Business, and it started its business operations on 15th December 2003.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Multi Commodity Exchange of India Ltd - MCX

CHENNAI
BANGALORE
COIMBATORE
Multi Commodity Exchange of India Ltd. (MCX), is a state-ofthe-art electronic commodity futures exchange. The demutualised Exchange has permanent recognition from the Government of India to facilitate online trading, and clearing and settlement operations for commodity futures across the country. The Exchange operates within the regulatory framework of the Forward Contracts Regulation Act, 1952 (FCRA, 1952) and regulations there under. It was established in 2003 and is based in Mumbai. The turnover of the exchange for the fiscal year 2009 was US$ 1.24 trillion, and in terms of contracts traded, it was in 2009 the world's sixth largest commodity exchange.
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
National Multi Commodity Exchange of India Ltd NMCEIL

CHENNAI
BANGALORE
The National Multi-Commodity Exchange of India Limited, is regarded as the first de-mutualised online multi-commodity exchange that has been established in the country. It was incorporated on 20th December 2001, but began business operations on 26th November 2002.
COIMBATORE
EMAIL
info@altacit.com
WEBSITE
It promoting and managing institutions include: Central Warehousing Corporation CWC National Agricultural Cooperative Marketing Federation of India Limited NAFED Gujarat Agro Industries Corporation Limited - GAIC National Institute of Agricultural Marketing - NIAM Gujarat State Agricultural Marketing Board - GSAMB Neptune Overseas Limited
www.altacit.com
Role of Commodity Exchange

CHENNAI
BANGALORE
COIMBATORE
Platform for hedging and speculation Standardization of futures Facilitation of real price discovery Ensuring fair play Track of business transacted Fixing rules for trading Dissemination of information
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
Structure of Indian Commodity Futures Exchanges

CHENNAI
BANGALORE
COIMBATORE
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
FOCUS
CHENNAI
BANGALORE
Why do we need this market?

Price Stability Liquidity and Volume Integrated Agricultural Market Risk trading by the small formers
COIMBATORE
EMAIL
info@altacit.com
WEBSITE
www.altacit.com
CHENNAI
BANGALORE
COIMBATORE
EMAIL
info@altacit.com
WEBSITE
www.altacit.com

Commodity Exchange: Lakshminarayanan Alaguraja Advocate Altacit Global

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Commodity Exchange: Lakshminarayanan Alaguraja Advocate Altacit Global

Uploaded by

Copyright:

Available Formats

CHENNAI

Lakshminarayanan Alaguraja Advocate Altacit Global

What are Commodities?

Commodity Exchange and Stock Exchange

Forward Controls (Regulation) Act, 1952

Forward Markets commission regulatory body .

Commodity exchange India

National Commodity and Derivatives Exchange Limited - NCDEX:

Multi Commodity Exchange of India Ltd - MCX

National Multi Commodity Exchange of India Ltd NMCEIL

Role of Commodity Exchange

Structure of Indian Commodity Futures Exchanges

Why do we need this market?

You might also like