Group Members

04 Saket Ambekar 05 Himanshu Anand 12 Devendra Belani 31 Divyakshi gupta

37 Ravi Jeswani 40 Akshay Kapse

48 Rohan Kulkarni

INDIA AND THE COMMODITY MARKET

HISTORY OF COMMODITY MARKET IN

INDIA
PRESENT COMMODITY MARKET IN INDIA

INDIAN COMMODITY MARKET STRUCTURE

MINISTRY OF CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION

FORWARD MARKET COMMISIO

COMMISIONINDIAN COMMODITY EXCHANGE

NATIONAL EXCHANGE

REGIONAL EXCHANGE

NCDEX

MCX

NMCEIL

ICEX

NBOT

20 OTHER REGIONAL EXCHANGES

NCDEX (National Commodity & Derivates Exchange Ltd.)

Incorporated on April 2003 and operational on Dec

15, 2003. NCDEX is located in Mumbai and currently facilitates trading in 57 commodities mainly in Agro product. Promoters shareholders are: Life Insurance Corporation of India (LIC), National Bank for Agriculture and Rural Development (NABARD) and National Stock Exchange of India (NSE)

MCX (Multi Commodity Exchange of India Ltd.)

Headquartered in Mumbai, MCX is a demutualised

nation wide electronic commodity future exchange. Facilitates online trading, clearing and settlement operations for future market across the country. MCX is well known for bullion and metal trading platform. MCX equity partners include, NYSE Euronext, State Bank of India and its associated, NABARD NSE, SBI Life Insurance Co. Ltd. , Bank of India, Bank of Baroda, Union Bank of India, Corporation Bank, Canara Bank, HDFC Bank, etc.

COMMODITIES TRADED IN INDIA

COMMODITY FUTURE MARKET

PRODUCT QUALIFICATION Product must not have gone through any complicated manufacturing activity Product has to be fairly standardized Presence of sellers of the product Product should have adequate shelf life COMMODITY FUTURES

 BENEFITS OF COMMODITY FUTURES

MARKETS

Price Discovery Price Risk Management Import- Export competitiveness Predictable Pricing Benefits for farmers/Agriculturalists Improved product quality Useful to the producer Useful for the consumer

INSTRUMENTS AVAILABLE FOR TRADING

FORWARD CONTRACTS
FUTURES MARKET OPTIONS

PARTICIPANTS OF COMMODITY MARKET

HOW THE COMMODITY MARKET WORKS

Process
Spot Trade.

Future Trade.
A Future Contract.
Short Position. Long Position.

Contract Details
Quantity. Quality. Price per Unit. Date and Method of Delivery.

WORKING PROCEDURE

Delivery Process
Open a Beneficiary DMAT

account. Information required for delivery

Commodity Quantity. Location

code.

Validation
On

Clients Net Open Position. On Delivery lot for commodity. Excess quantity rejected and cash settled. Matched delivery information.

 Matching Parameters
Commodity. Quantity. Location. Branch. Matching to the total warehouse capacity. Settlement through Depository.

Commodity Trading System

III. SETTLEMENT

-Order receiving - Execution - Matching - Reporting - Surveillance - Price limits - Position limits

- Matching - Registration - Clearing - Clearing limits Notation - Margining - Price limits - Position limits - Clearing house

-Marking to market - Receipts and payments - Reporting - Delivery upon expiration or maturity

I. TRADING

II. CLEARING

CURRENT SCENARIO OF INDIAN COMMODITY MARKET

UNRESOLVED ISSUES

Commodity Options

The Warehousing and Standardization

The Regulator
Tax and Legal bottlenecks

FUTURE PROSPECTS
Regulatory approval/permission to FIIS to trading

in the commodity market.

Active Involvement of mutual fund industry of India. Active involvement of small Regional stock

exchanges
Convergence of variance market.

CONCLUSION