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    Commodity Market

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    haseeb_tankiwala
    This document provides an overview of commodity markets in India. It discusses the history and development of commodity exchanges in India since the 19th century. It then describes the key characteristics of commodity markets and lists the major national and regional commodity exchanges in India. Finally, it discusses various aspects of commodity trading such as the commodities traded, market participants, delivery and settlement processes, and the regulatory framework for commodity markets in India.

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    Commodity Market

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    haseeb_tankiwala
    232 views21 pages
    This document provides an overview of commodity markets in India. It discusses the history and development of commodity exchanges in India since the 19th century. It then describes the key characteristics of commodity markets and lists the major national and regional commodity exchanges in India. Finally, it discusses various aspects of commodity trading such as the commodities traded, market participants, delivery and settlement processes, and the regulatory framework for commodity markets in India.

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    This document provides an overview of commodity markets in India. It discusses the history and development of commodity exchanges in India since the 19th century. It then describes the key characteristics of commodity markets and lists the major national and regional commodity exchanges in India. Finally, it discusses various aspects of commodity trading such as the commodities traded, market participants, delivery and settlement processes, and the regulatory framework for commodity markets in India.

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    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    232 views21 pages

    Commodity Market

    Uploaded by

    haseeb_tankiwala
    This document provides an overview of commodity markets in India. It discusses the history and development of commodity exchanges in India since the 19th century. It then describes the key characteristics of commodity markets and lists the major national and regional commodity exchanges in India. Finally, it discusses various aspects of commodity trading such as the commodities traded, market participants, delivery and settlement processes, and the regulatory framework for commodity markets in India.

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    INTRODUCTION

    WHAT IS COMMODITY?
    WHAT IS COMMODITY MARKET WHAT IS COMMODITY EXCHANGE?

    HISTORY
    The history of organized commodity derivatives in India goes back to the

    nineteenth century when Cotton Trade Association started futures trading in 1875
    Cotton, derivatives trading started in oilseed in Bombay (1900), raw jute and jute

    goods in Calcutta (1912), Wheat in Hapur (1913) and Bullion in Bombay (1920).
    The parliament passed the Forward Contracts (Regulation) Act, 1952, which

    regulated contracts in Commodities all over the India.


    After Liberalization and Globalization in 1990, the Government set up a

    committee (1993) to examine the role of futures trading.

    COMMODITY MARKETS KEY CHARACTERISTICS

    CONSUMPTION GOODS

    NON STANDARD STRUCTURE

    COST OF PRODUCTION

    PRICE BEHAVIOR

    STRUCTURE OF COMMODITY MARKET

    NATIONAL LEVEL COMMODITY EXCHANGES IN INDIA


    NMCE (National Multi Commodity Exchange of India Ltd.) NCDEX (National Commodity & Derivates Exchange Ltd.)

    MCX (Multi Commodity Exchange of India Ltd.)


    ICEX (Indian Commodity Exchange Ltd.)

    MAJOR REGIONAL COMMODITY EXCHANGES IN INDIA


    BATINDA COMMODITY & OIL EXCHANGE LTD. THE KANPUR COMMODITY EXCHANGE THE BOMBAY COMMODITY EXCHANGE THE MEERUT AGRO COMMODITY EXCHANGE THE SPICES AND OILSEEDS EXCHANGE (SANGI) THE RAJKOT SEEDS OIL AND BULLION MERCHAT AHEMDABAD COMMODITY EXCHANGE

    VIJAY BEOPAR CHAMBER LTD. (MUZAFFARNAGAR)


    E SUGAR INDIA LTD. (MUMBAI)

    INDIA PEPPERS AND SPICE TRADE ASSOCIATION ( KOCHI )


    THE COFEE FUTURE EXCHANGE LTD. ( BANGALORE )

    RAJDHANI OILS AND SEEDS EXCHANGE ( DELHI )


    BIKANER COMMODITY EXCHANGE LTD. ( BIKANER )

    FIRST COMMODITY THE EAST INDIA JUTE & HESSIAN EXCHANGE OF INDIA (KOCHI ) EXCHANGE OF INDIA (KOLKATA)

    THE CENTRAL COMMERCIAL EXCHANGE ( GWALIOR )

    COMMODITY MARKETS OF WORLD


    New York Mercantile Exchange (NYMEX) New York Board of Trade (NYBOT) London Metal Exchange (LME) Mercantile Exchange (NYMEX) Chicago Board of Trade (CBOT) Dubai Mercantile Exchange (DME)

    London International Financial Futures and Options Exchange (LIFFE)

    Sydney Futures Exchange

    Shanghai Futures Exchange

    Tokyo Commodity Exchange London Metal Exchange (TOCOM)

    Chicago Mercantile Exchange (CME), US

    Singapore Commodity Exchange (SICOM)


    Winnipeg Commodity Exchange, Manitoba

    Bursa Malaysia Derivatives exchange


    Kansas Board of Trade

    Dalian Commodity Exchange, China

    COMMODITIES TRADED IN INDIA


    FIBRES & MANUFA CTURE
    ENERGY PRODUCT

    METALS

    EDIBLE OILSEE D & OIL

    COMMO DITIES

    VEGETA BLE

    SPICES

    PULSES

    COMMODITY FUTURE MARKET


    WHAT IS COMMODITY FUTURES ? CRITERIA FOR QUALIFY AS A COMMODITY FOR FUTURES

    TRADING
    OBJECTIVES OF COMMODITY FUTURES BENEFITS OF COMMODITY FUTURES MARKETS WHAT MAKES COMMODITY TRADING ATTRACTIVE?

    STRATEGIES FOR TRADING IN COMMODITIES AND FUTURES


    Going Long Going Short Spreads Calendar spread Inter-Market spread Inter-Exchange spread

    HOW TO TRADE IN COMMODITY MARKET


    There are three Methods which are as follows:
    SELF DIRECTED

    FULL SERVICE
    COMMODITY POOL

    Market share of commodity exchanges in India


    NBOT 2% NMCE

    Sales

    OTHERS 2%

    1%

    NCDEX 22%

    MCX 73%

    INSTRUMENTS AVAILABLE FOR TRADING


    FORWARD CONTRACTS FUTURES MARKET

    MARGIN REQUIREMENTS
    OPTIONS

    PARTICIPANTS OF COMMODITYMARKET

    HEDGERS SPECULATORS ARBITRAGERS

    COMMODITY MARKET WORKS

    DELIVERY PROCESS
    Procedures for delivery Information required for delivery Delivery process requires Validation of delivery information Matching parameters Clearing and Settlement

    REGULATORY FRAMEWORK INDIAN COMMODITY MARKET


    Need for Regulation Forward Markets Commission Forward Markets Commission (FMC) headquartered at Mumbai It is a statutory body set up in 1953 under the Forward Contracts

    (Regulation) Act, 1952.


    Overseen by the Ministry of Consumer Affairs, Food and Public

    Distribution, Govt. of India.

    DEMATERIALIZATION AND REMATERIALIZATION IN COMMODITY MARKETS


    What is a Warehouse Receipt? Entities involved in the Demat process Types of Demat Account Process of Demat Commodity Concept of International Commodity Identification Number

    (ICIN)

    Process of Demat Delivery

    UNRESOLVED ISSUES
    Commodity Options The Warehousing and Standardization Cash versus Physical Settlement The Regulator Lack of Economy of Scale Tax and Legal bottlenecks

    SUGGESTION
    Regulatory approval/permission to FIIS to trading in the commodity market.

    Active Involvement of mutual fund industry of India.


    Permission to Banks for acting as Aggregators and traders. Active involvement of small Regional stock exchanges. Newer Avenues for trading in Foreign Derivatives Exchanges. Convergence of variance market.

    Amendment of the commodities Act and Implementers of VAT.


    Introduction of option contract.

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