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International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 4, No. 12, December 2015

i-Explore International Research Journal Consortium www.irjcjournals.org

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Commodity Exchanges in Commodity Markets of India: An

Analytical Study of National Commodity Exchanges

Dr. Shree Bhagwat, Asst. Prof., Department of Business Management, Dr. Harisingh Gour Vishwavidyalaya, Sagar,

Madhya Pradesh, India (A Central University)

Angad Singh Maravi, Research Scholar, Department of Commerce, Dr. Harisingh Gour Vishwavidyalaya, Sagar,

Madhya Pradesh, India (A Central university)

ABSTRACT

Commodity futures trading in India has a long and old

history, India’s first commodity exchange was established

in 1875 with the Bombay Cotton Trade Association.

Futures market in bullion was began to emerge in Mumbai

in 1920. Currently, in India, there are 22 recognized

commodity exchanges, of which the six national level

electronic multi-commodity exchanges are: NMCE,

(Ahemadabad); MCX, (Mumbai); NCDEX, (Mumbai);

ICEX, (Mumbai); ACE, (Ahemadabad); and UCX,

(Mumbai). India has experienced phenomenal growth in

the commodity derivatives markets since 2003, once the

Government lifted restrictions on futures trading. At

present, there are 6 National Level Commodity Exchanges

operates in India. Secondary data collected from books,

journals, magazines websites of Forward Markets

Commission (FMC) and national level commodity

exchanges in India for the period 2009-10 to 2013-14.

This paper is an attempt to investigate for the structure

and performance of commodity exchanges in India. MCX

is the world’s largest future’s commodity exchange in

Silver, Gold, and Crude Oil. The national exchanges

accounted for 99.72% of the turnover of commodity

futures contracts traded in India during Financial Year

2013-14. MCX alone had a market share of 84.89% in

2013-14.

Keywords Commodity Market; Commodity Derivatives Market;

Commodity Futures; Commodity Exchanges; FMC

1. INTRODUCTION

The concept of organized futures trading in commodities

evolved in the middle of the 19th

century. And during the

first half of the 20th

century, there were several commodity

exchanges trading in jute, pepper, turmeric, potatoes,

sugar, etc. Gradually, the farmers (sellers) and dealers

(buyers) started committing to exchange the produce for

cash in future. The commodity exchanges have, as part of

its business models, had to create the necessary

infrastructure to conduct their operations. Commodity

markets are meeting places of buyers and sellers and the

commodity exchange in Indian mainly trade bullion, huge

metals, energy and agricultural produced. Unlike

developed countries, foreign currency and stock indices

are not part of our commodity market and are unlikely to

be integrated in near future. Commodity markets in India

are still in their initial stages of development. Commodity

markets have a huge potential in the Indian contract

particularly because of the agri-based economy. With the

government’s initiative for agricultural liberalization

commodities trading in India have gained incased ventures

in utilities. Commodity exchanges are for investors and

commodity buyers go to purchase futures, derivatives and

commodities for trading or profit. A commodity exchange

is a place where various commodities and derivatives are

bought and sold. Commodities exchanges usually trade on

commodity futures. Commodities are being in commodity

exchanges. Commodity exchanges provides electronic

platform for seller and buyers to trade in multiple options

available. An individual cannot directly go to exchange

and make the trade. Exchange authorizes brokers, who

interact with customers (investors) on behalf of exchange

and charges commission/brokerage for their services. At

present, in India, there are 22 commodity exchanges, of

which the six national level commodity exchanges. The

national level exchanges include the National Multi

Commodity Exchange of India Limited (NMCE),

Ahmadabad; Multi Commodity Exchange of India Limited

(MCX), Mumbai; National Commodity and Derivatives

Exchange of India Limited (NCDEX), Mumbai; Indian

Commodity Exchange Limited (ICEX), Mumbai as a

nation-wide multi commodity exchange, Ace Commodity

and Derivatives Exchange Limited, (ACE) Ahemadabad

and recently, established Universal Commodity Exchange

Limited, (UCX) Mumbai.

2. OBJECTIVES OF THE STUDY

(i) To study the evolution and organizational structure

of commodity exchanges in India.

(ii) To analyze the performance of commodity

exchanges in India (2009-10 to 2013-14).



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3. REVIEW OF LITERATURE

This study is equipped with comprehensive review on

commodity exchanges. Abundance literature on

commodity futures trading in general gives theoretical

explanation for the emergence of commodity exchanges in

India.

M. Dhanbhakyam and P. Kamalnath (2010) in his paper “Financial Performance of National Commodity Exchange

Companies (NMCE, MCX, and NCDEX) in India: A

Profitability and Efficiency Focus” attempted to study is an

investigation into the present status, growth constraints

and developmental policy alternatives for commodity

futures market in India. The empirical findings of the

study in the context of commodity future as a diversifying

agent to the equity portfolio are twofold. The study also

found that MCX Energy futures do not add any

diversification benefit to the portfolio of equities whereas

MCX Agri futures are found to be the best diversifying

agents.

Ghosh M. (2011) in his study “Agricultural Policy

Reforms and Spatial Integration of Food Grain Markets in

India” investigated the impact of agricultural policy

reforms on spatial integration of rice and wheat markets in

India. The results indicate that the extent of intra- and

inter-state spatial integration of these markets has

improved during the post-reform period relative to the pre-

reform one. The results suggest that in well-integrated

food markets, this type of famine could be avoided by

suitably designing agricultural price policy and

rationalizing government activities in the food economy.

Takeshi INOUE and Shigeyuki HAMORI (2012) in his

paper “Market Efficiency of Commodity Futures in India

”

examined the market efficiency of the commodity futures

market in India, which has been growing phenomenally

for the last few years. They found that the long-run

equilibrium relationship between the Multi-Commodity

futures and spot price and then test for market efficiency

in a weak form sense by applying both the DOLS and the

FMOLS methods. The entire sample period is from 2

January 2006 to 31 March 2011. The results show that

there is a co integrating relation between them, which

means that a necessary condition for market efficiency is

satisfied.

S. Selvanthan and V. Manohar (2013) in his paper “Online Trading-An Insight to Commodities Trade with

Special Reference to India“ examine that the online trading

involves investment activity which takes place over

Internet and it does not require physical inclusion of the

brokers. As the servers of the online trading portal are

connected all time to the stock exchanges and designated

banks the order processing is done in real time and

investor can also have updates on the trading Even though

online trading in India has slowed down somewhat at the

present time, it is our belief that it will pick up speed the

future. M. Venkateswari and Ravindran (2014) in his

study “Commodity Derivatives Exchanges in India: A

study of selected Exchanges” examines the Derivatives

provide an effect solution to the problem of risk caused by

uncertainty and volatility in the underlying assets. In India,

the emergence and growth on the derivatives markets is

relatively a recent phenomenon. The study is undertaken

to analyze the trend of and progress of Commodity

Derivatives Trading in NCDEX and MCX and evaluate

the performance of these two commodity exchanges.

S Poornima, and Deepthy K (2015) in his paper

“Commodity Market in India” investigated the

Commodity market has a great potential to become a

separate asset class for market savvy investors,

arbitrageurs and speculators. The retail investors should

understand the risk and advantages before entering into

commodity market. The study attempts to throw light on

commodity market in India and to find out the impact of

the SEBI-FMC merger and also to analyze future growth

prospects and challenges of Indian commodity markets.

4. RESEARCH METHODOLOGY

The present study is based on the analytical and

descriptive research. There is no tool applied due to

turnover, values fluctuation from year to year. The

National level commodity exchanges in India namely

NMCE, MCX, NCDEX, ICEX, ACE, and UCX were

selected for the study. The study mainly depends upon the

published secondary data. Secondary data are collected

from the books related topics, articles, reputed journals;

newspapers articles, websites, various reports and records

issued and maintained by the Government of India are also

used in the study.

5. EVOLUTION AND HISTORY OF

INDIAN COMMODITY EXCHANGES

The evaluation of the organized futures market in India

commenced in 1875 with the setting up of the Bombay

Cotton Trade Association Ltd. In India, the first

commodity futures exchange was set up in 1875, in

Mumbai, under the aegis of Bombay Cotton Traders

Association. Subsequently, many exchanges came up in

different part of the country for futures trade in various

commodities. The Futures trading in oilseeds started in

1900 with the establishment of the Guarati Vyapari

Mandli, which carried on futures trading in groundnut,

castor seed and cotton. Futures’ trading in wheat was

existent at several places in Punjab and Utter Pradesh. But

wheat futures market began at Hapur in 1913. Futures

trading in bullion began in Mumbai in 1920 and later

similar markets came up at Rajkot, Jaipur, Jamnagar,



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Kanpur, Delhi and Calcutta. Calcutta Hessian Exchange

Ltd. Was established in 1919 for futures trading in raw

jute and jute goods. But organized futures trading in raw

jute began only in 1927 with the establishment of East

Indian Jute Association Ltd. These two associations

amalgamated in 1945 to from the East India Jute and

Hessian Ltd. to conduct organized trading in both Raw

Jute and Jute goods. During the Second World War futures

trading was banned.

After independence, the constitution of India brought the

subject of “Stock Exchanges and futures markets

” in the

Union list The Forward Contract (Regulation) Act was

enacted in 1952 and the Forward Markets Commission

(FMC) was established in 1953 under the Ministry of

Consumer Affairs. FMC acts as a regulatory body, which

regulates the commodity markets in India. The futures

trade in spices was first organized by the India pepper and

Spices Trade Association (IPSTA) in Cochin in 1957. The

mid-1960s witnessed an unprecedented rise in the prices of

major oils and oilseeds as a result of a sharp fall in output.

Futures trade was banned in most commodities to contain

speculation, which the government attributed to rising

inflation. Later, futures’ trading was altogether banned by

the government in 1966 so that the government could have

control on the movement of prices of many agricultural

and essential commodities. In 1970s most of the registered

association became inactive, as futures as well as forward

trading in commodities were either suspended or

prohibited altogether. In 1980 the Khusro Committee

recommended re-introduction of futures trading in most of

the major commodities like cotton, kapas, raw jute and

jute goods. The government, accordingly initiated futures

trading in potato during the latter half of 1980. After the

introduction of economic reforms June 1991, the

government of India appointed another committee to

review Forward Markets. The committee set up under

Chairmanship of Prof. K.N. Kabra in June 1993 and the

committee submitted its report in September 1994. In

order to boost the agricultural sector, the National

Agricultural Policy 2000 envisaged external and domestic

market reforms and dismantling of all controls and

regulations in the agricultural commodity markets.

In 2002-03, The Government of India took two steps that

gave a fillip to the commodity markets. The first one was

setting up of nationwide demutualized multi commodity

exchanges and the second one was expansion of list of

commodities permitted for trading. Currently there are six

National Level Commodity Exchanges and 23 regional

exchanges operating in India. The national level

exchanges include National Multi Commodity Exchange

of India Ltd., (NMCE), Ahmadabad; Multi Commodity

Exchange of India Ltd., (MCX), Mumbai; The National

Commodities and Derivatives Exchange Ltd., (NCDEX),

Mumbai; which have been working since 26th

November2002, 10th

November 2003 and 15th

December

2003 respectively. NCDEX Spot Exchange Ltd., (NSPOT)

is an electronic spot exchange in India, set up by NCDEX

on October 18, 2006. NSPOT offers an electronic trading

platform for trading in a host of commodities, both

agricultural and non-agricultural, to various market

participants, primary producers, including farmers, traders,

processors, etc. MCX has also set up the National Spot

Exchange Ltd., (NSEL) in October 2008. The mission of

NSEL is to develop a common Indian market, by setting

up a national level electronic spot market and providing

state-of art trading, delivery and settlement facilities in

various commodities, which can be accessed from across

the country. Indian Commodity Exchange India Ltd.,

(ICEX), Mumbai as a nation-wide multi commodity

exchanges working in 2009. ACE Commodity and

Derivatives Exchange Ltd., Ahmadabad was granted

recognition on 10th

August, 2010. ACE became a National

Exchange by upgrading itself from a Regional Exchange.

The Ministry of Consumer Affairs, Food & Public

Distribution, GOI, vide Notification dated 30th

August,

2012, granted recognition to the Universal Commodity

Exchange Ltd., (UCX), Mahape, Navi Mumbai on a

permanent basis in respect of forward contracts in all the

commodities in which Section 15 is applicable and the

commodities to which neither Section 17 nor Section 15 of

the Forward Contracts (Regulation) Act, is applicable.

UCX is the India’s 6th

National Commodity Exchange

Limited.

6. ORGANIZATIONAL STRUCTURE OF

COMMODITY EXCHANGES IN INDIA

At present, in India, there are three tiers of regulations of

forward/futures trading system, consist the Government of

India at set the top, followed by the Forward Markets

Commission (FMC) and then the Commodity Exchanges.

The commodity futures traded in commodity exchanges

are regulated by the Government under the Forward

Contracts Regulations Act, 1952 and the Rules framed

there under. The regulator for the commodities trading is

the Forward Markets Commission, situated at Mumbai,

which comes under the Ministry of Finance, Department

of Economic Affairs, (Government of India). In the

hierarchy of Indian commodity exchanges market, the

Forward Markets Commission (FMC) is a statutory body

set up the Forward Contracts (Regulation) Act. 1952.

Futures trading and the Forward Contracts (Regulation)

Act of 1952 were shifted to Department of Economic

Affairs (DEA) from Department of Consumer Affairs

(DCA). In September 2013, the regulatory body FMC has

been brought under the control of Ministry of Finance.

The structure of commodity exchanges market in India is

as follow:



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Figure: 1 Structure of Commodity Exchanges

The commodity exchanges under the Forward Markets

Commission are divided into national and regional

commodity exchanges. At present, there are 6 national

level commodity exchanges and 23 regional level

commodity exchanges operating in India and carrying out

futures trading activities in as many as 146 commodity

items. As per the recommendation of the Forward Markets

Commission (FMC), the Government of India recognized

the 6 National Level Commodity Exchanges; these are

NMCE, MCX, NCDEX, ICEX, ACE, and UCX.

7. COMMODITY EXCHANGES IN INDIA

India has experienced phenomenal growth in the

commodity derivatives markets since 2003, once the

Government lifted restrictions on futures trading. After

Government approval for operation of multiple exchanges,

the exchange environment has become highly competitive

in terms of product development and business strategies.

Private sector initiatives, seeking to tap the potential value

of agricultural trading, have become key catalysts in this

process. Presently, in India, there are 22 commodity

exchanges, of which the six national level multi

commodity exchanges, and other regional commodity

exchanges.

Table 1: List of Commodity Exchanges Recognized by Forward Markets Commission

The following are the list of exchanges and commodities in which futures contracts are traded in India are as follow:

S. No Name of the Exchanges

A. National Exchanges

1 Multi Commodity Exchange of India Ltd., (MCX)

2 National Commodity & Derivatives Exchange of India Ltd., (NCDEX)

3 National Multi Commodity Exchange of India Ltd., (NMCE)

4 Indian Commodity Exchange Ltd., (ICEX)

5 Ace Derivatives and Commodity Exchange Ltd., (ACE)

6 Universal Commodity Exchange Ltd., (UCX)



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B. Commodity Specific Regional Exchanges

7 Bikaner Commodity Exchange Ltd., Bikaner

8 Bombay Commodity Exchange Ltd., Vashi, Bombay

9 Chamber of commerce, Hapur

10 Central India Commerce Exchange Ltd. Gwalior

11 Cotton Association of India, Mumbai

12 East India Jute & Hussian Exchange Ltd. Kolkata

13 First Commodities Exchange of India Ltd., Kochi

14 Haryana Commodities Ltd., Sirsa

15 India Pepper & Spices Trade Association Kochin (IPSTA)

16 Meerut Agro Commodity Exchange Co. ltd. Meerut

17 National Board of Trade (NBOT), Indore

18 Rajkot Commodity Exchange Ltd., Rajkot

19 Rajdhani Oils & Oilseed Exchange ltd., Delhi

20 Surendranagar Cotton oil & Oilseeds Association Ltd., Surendranagar

21 Spices & Oilseeds Exchange Ltd. Sangli

22 Vijay Beopar Chamber Ltd., Muzaffarnagar

Source: Forward Markets Commission (FMC), Mumbai

Other Regional Commodity Exchanges Not Recognized by Forward Markets Commission

S. No. Name of the Exchanges

1 Bhatinda Om & Oil Exchange ltd., Bhantinda

2 East India cotton Association Ltd., Calcutta

3 Kanpur Commodity Exchange Ltd., Kanpur

4 E-Sugar India Ltd., Mumbai

5 Coffee Futures Exchange India Ltd., Bangalore

6 E-Commodities Ltd., New Delhi

7 Bullion Merchants Association Limited, Bikaner

NATIONAL COMMODITY EXCHANGES

In India, there are six national level commodity exchanges

are described below:

(1) National Multi-Commodity Exchange of India

Limited (NMCE): National Multi Commodity Exchange

of India Ltd., India’s first state-of art demutualised,

electronic, multi- commodity exchange. It is based in

Ahmadabad. National Multi Commodity Exchange Ltd.

(NMCE), promoted by commodity-relevant public

institution viz., Central Warehousing Corporation (CWC),

National Agricultural Cooperative Marketing Federation if

India (NAFED), Gujarat Agro-Industries Corporation Ltd.,

(GAICL), Gujarat State Agricultural Marketing Board

(GSAMB), National Institution of Agricultural Marketing

(NIAM), Neptune Overseas Ltd., (NOL) and PNB Bank

took equity of the Exchange to establish that linkage.

Contracts traded on NMCE are based on commodities that

in clued cash crops, food grains, plantations, spices, oil

seeds, metal and bullion, among others.

(2) Multi Commodity Exchange of India Ltd., (MCX):

MCX is an independent, and demutualised online multi-

commodity exchange started in 2003. It is based in

Mumbai. The exchange is promoted by Financial

Technologies India Limited, SBI and its associations,

NABARD, NSE, Fid Fund (Mauritius) Ltd., an affiliate of

Fidelity International-Corporation Bank, Union Bank of

India, Canara Bank, Bank of India, Bank of Baroda,

HDFC Bank, SBI Life Insurance Co. Ltd., ICICI Ventures,

IL&FS and Merrill Lynch. MCX offers futures trading in

agricultural commodities, bullion, ferrous and non-ferrous

metals, pulses, oil and oilseeds, energy, plantations spices

and other soft commodities.

(3) National Commodity and Derivatives Exchange

Limited (NCDEX): NCDEX is an independent and

demutualised online commodity exchange that also started

in 2003. It is based in Mumbai. NCDEX is promoted by

national level institutions like LIC, NABARD, NSE, PNB

Bank, CRISIL Ltd., Indian Farmers Fertilizer Co. Ltd.,

(IFFCO), Canara Bank, Goldman Sachs and ICE. NCDEX

lists contracts on a host of agricultural commodities,

besides metals, plastics, gold, and energy products.

(4) Indian Commodity Exchange Ltd. (ICEX): ICEX

incorporated in 2009, ICEX is National online derivative

exchange of India which has established a transparent,

time-tested and reliable trading platform. It has its

headquarter in Mumbai and many regional offices across



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the country which cover agricultural region with a

objective to encourage farmers, traders and actual users

participation to hedge their position against the extensive

price fluctuations. ICEX is promoted by India bulls

financial Services Ltd., Reliance Exchange Next

Infrastructure Ltd., and MMTC Ltd., KRIBHCO, Indian

Potash Ltd., and IDFC among others as its partners. It

deals with the commodity trading of bullions, Base

Metals, energy and Agricultural Commodities.

(5) ACE Derivatives and Commodity Exchange Ltd.

(ACE): ACE Derivatives Exchange was set up in 2010. It

has registered office at Ahmadabad and corporate office at

Mumbai. ACE promoted by Kotak Mahindra Group, The

Haryana State Cooperative Supply & Marketing

Federation Ltd. (HAFED) is an apex State Co-operative

service and marketing institution, under the patronage and

sponsorship of the Government of Haryana, Bank of

Baroda, Corporation Bank and Union Bank of India. It

facilitates trading in oil and oilseeds, pluses, Guar Gum,

Sugar and in Fiber.

(6) Universal Commodity Exchange Limited (UCX):

Universal Commodity Exchange Ltd., was set up in 2012.

UCX prompted by institutions such as IDBI Bank, Indian

Farmers Fertilizer Cooperative Ltd., (IFFCO), NABARD,

Rural Electrification Corporation Ltd., (REC), and

COMMEX Technology. The Exchange facilitates futures

trading in gold, silver, crude oil, chana, rubber, mustard

seed, soya bean, refined soya oil and turmeric.

8. ANALYSIS OF THE PERFORMANCE OF NATIONAL COMMODITY EXCHANGES

Table 2: Total Turnover of Commodity Exchanges- (2009-10 to 2013-14)

The share of Commodity Exchanges in the total value in Rs. Cr. and % of the commodities traded

EXCHANGES 2009-10

Value in Cr. 2010-11




Value in Cr.

MCX 6393302.17

(82.34)

98,41,502.90

(82.36)

15597095.47

(86 .05)

14881057.12

(87.00)

8611449.07

(84.89)

NCDEX 917584.71

(11.82)

14,10,602.21

(11.81)

1810210.1

(9.99)

1598425.87

(10.00)

1146328.09

(11.30)

NMCE 227901.48

(2.94)

2,18,410.90

(1.83)

268350.95

(1.48)

176570.86

(1.00)

152819.01

(1.51)

ICEX 136425.36

(1.76)

3,77,729.88

(3.16)

258105.67

(1.42)

169897.14

(1.00)

85664.19

(0.84)

ACE -- 30,059.63

(0.25)

`138654.61

(0.7 6)

172010.18

(1.00)

46756.74

(0.46)

UCX -- -- -- -- 73013.19

(0.72)

Others 89540.33

(1.14)

70636.83

(0.59)

53686.98

(0.30)

48878.92

(0.01)

28764.69

(0.28)

GRAND

TOTAL

7764754.050

(100.00)

11948942.35

(100.00)

18126103.78

(100.00)

17046840.09

(100.00)

10144794.98

(100.00)

Source: www.fmc.gov.in (Forward Markets Commission)

The table clearly shows the share of various commodity

exchanges in the total value of trade from the year 2009-

10 to 2013-14, which indicates an increasing trend value

of traded commodities in 2009-10 to 2011-12. It was

7764754.054 crore in 2009-10 which increases to

18123103.78 crore in 2011-12. The value of trade

17046840.09 crore in 2012-13 which decrease to

10144794.98 crore in 2013-14. The total value of trade in

the MCX commodity exchange traded 82.34% of the value

and increased its share of 87.00% from 2009-10 to 2012-

13, similarly share in value of trade decreased 84.89% in

2013-14. While the NDEX exchange share in value of

trade decreased from 11.82% to 9.99% by the 2009-10 and

2011-12, similarly share in value of trade 10.00% to

11.30% by 2012-13 to 2013-14.While the NMCE

exchange share also decreased its share in value of total

commodities traded from 2.94% to 1.00% from 2009-10 to

2012-13, while share in value of trade 1.51% in 2014. The

National Exchanges, which the adoption of modern

technology, have spread the facility of commodity futures

trading across the country. MCX recorded the highest

turnover in terms of value of trade from 2009-10 to 2013-

14 followed by NCDEX, NMCE, and ICEX.

http://www.fmc.gov.in/



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I. Multi Commodity Exchange of India Limited, (MCX)

Table 3: Commodities Traded in Value from 2009-10 to 2013-14 in MCX

2009-10





Value in Cr.

GOLD 1922207.39

(30.07)

2469246.20

(25.09)

4224785.993

(27.09)

3720129.35

(25.00)

2482438.18

(28.83)

SILVER 1141707.31

(17.86)

2700017.25

(27.44)

5738871.122

(36.79)

4086933.38

(27.46)

1780756.98

(20.68)

CRUDE OIL 1219045.51

(19.07)

1764067.84

(17.92)

2463336.416

(15.79)

2981891.98

(20.04)

1794312.34

(20.84)

COPPER 903409.43

(14.13)

1145074.86

(11.64)

1437082.176

(9.21)

1443348.37

(9.70)

776666.28

(9.02)

NATURAL GAS 322249.15

(5.04)

-- 260916.044

(1.67)

672892.89

(4.52)

655322.01

(7.61)

NICKEL 275277.35

(4.31)

464577.93

(4.72)

385334.138

(2.47)

432047.18

(2.90)

187172.77

(2.17)

ZINC 260172.12

(4.07)

389457.78

(3.96)

-- 416834.42

(2.80)

228653.60

(2.66)

LEAD -- 306414.62

(3.11)

259508.657

(1.66)

616192.21

(4.14)

398401.56

(4.63)

ALUMINIUM

-- -- -- 229582.03

(1.54)

134964.85

(1.57)

COTTON -- -- -- -- 62439.13

(0.73)

CPO -- -- -- 106409.66

(0.72)

--

OTHERS 349233.91

(5.46)

602646.43

(6.12)

827260.922

(5.32)

174795.65

(1.18)

110321.38

(1.26)

TOTAL 6393302.17

(100.00)

9841502.91

(100.00)

15597095.468

(100.00)

14881057.12

(100.00)

8611449.07

(100.00)


MCX is the major contributor in the commodity market in

trade of value. From the table has increased in absolute

terms over the years from 2009-10 to 2011-12. The total

value of trade increased sharply from 6393302.17 crore in

2009-10 to Rs 15597095.468 crore in 2011-12, the value

of trade decreased 14881057.12 crore in 2012-13 to Rs

8611449.07 crore in 2013-14.Silver, Gold, Crude Oil and

Copper and other commodities increased over the years

but the growth is not considerable. The percentage share

of Silver in total value of commodities traded in MCX

exchange increased from 17.86% to 36.79% from 2009-10

to 2011-12, similarly share of total value decreased from

27.46% to 20.68% from 2012-13 to 2013-14.While the

share of Gold to total value of commodities traded to total

commodities decreased from 30.07% to 25.09% from

2009-10 to 2010-11 and then increased to 27.09% in 2011-

12, similarly share of total value decreased 25.00% in

2012-13 thereby increased to 28.83% in 2013-14. Whereas

the share of Crude Oil decreased from 19.07% to 15.79%

from the year 2009-10 to 2011-12, and then increased to

20.04% to 20.84% from 2012-13 to 2013-14. Lead was

not traded in 2009-10. Natural gas was not traded in

2010-11 year where as zinc was not trade in the year 2011-

12. Aluminium was traded in during 2012-13 and 2013-

14. Cotton was traded in MCX during 2013-14. CPO was

traded only in the year 2012-13.In MCX, Gold, Silver, and

Crude Oil were the most actively traded commodities.




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II. National Commodity and Derivatives Exchange of India Limited, (NCDEX)

Table 4: Commodities Traded in Value from 2009-10 to 2013-14 in NCDEX

COMMODITIES 2009-10





Value in Cr.

SOYABEAN 98926.85

(10.78)

101645.48

(7.21)

122637.796

(6.77)

217991.11

(13.64)

182336.33

(15.91)

SOYA OIL 136651.76

(14.89)

260362.79

(18.46)

415762.053

(22.97)

557601.60

(34.88)

269914.56

(23.55)

GUAR SEED 258031.27

(28.12)

246283.33

(17.46)

323119.643

(17.85)

-- --

GUAR GUM -- -- 98356.672

(5.43)

-- --

CRUDE OIL -- 193090.55

(13.69)

86225.698

(4.76)

-- --

CHANA 106295.87

(11.58)

112736.16

(7.99)

274604.955

(15.17)

159492.63

(9.98)

132966.22

(11.60)

RAPE MUSTARD

SEED

84778.79

(9.24)

87161.91

(6.18)

165405.051

(9.14)

180196.82

(11.27)

84217.51

(7.35)

CASTOR SEED -- -- -- 93828.42

(5.87)

161068.66

(14.05)

TURMERIC 79967.29

(8.71)

--

-- 33083.60

(2.07)

29606.19

(2.58)

PEPPER -- 80460.50

(5.70)

-- -- --

JEERA 33720.03

(3.67)

-- -- 65955.89

(4.13)

28917.50

(2.52)

DHANIYA -- -- -- 52828.99

(3.31)

95259.02

(8.31)

COTTONSEED

OILCAKE

-- -- -- 65460.34

(4.10)

51044.17

(4.45)

KAPAS -- -- -- 36775.61

(2.30)

35461.41

(3.09)

OTHER 119212.85

(13.01)

328861.49

(23.31)

324098.228

(17.91)

135210.86

(8.46)

75536.52

(6.59)

TOTAL 917584.71

(100.00)

1410602.21

(100.00)

1810210.096

(100.00)

1598425.87

(100.00)

1146328.09

(100.00)


NCDEX is second largest commodity exchanges in India.

The table shows the annual growth of commodity market

in India for period 2009-10 to 2011-12. The total value of

trade increased from 917584.71 crore in 2009-10 to Rs

1810210.21 crore in 2011-12, whereas value of trade

decreased 1598425.096 crore to 1146328.0 crore from

2012-13 to 2013-14. The percentage share value of Soya

Oil to total value of commodities traded increased from

14.89% to 34.88% from 2009-10 to 2012-13 and then

decreased to 23.55% in 2013-14. The share of Soya bean

decreased from 10.78% to 6.77% from 2009-10 to 2011-

12 and then increased 13.64% to 15.91% from 2012-13 to

2013-14. Pepper was traded only in the year 2010-11

while as guar gum is traded in 2011-12, crude oil was

traded in both 2010-11 and 2011-12 years where as

turmeric and jeera was not traded in the years 2010-11 and

2011-12. Guar seed was not traded in both 2012-13 and

2012-13. Castor seed was traded in 2012-13 and 2013-14.

Kapas, Cottonseed Oilcake, and Dhaniya were traded in

NCDEX during 2012-13 and 2013-14.




9

III. National Multi Commodity Exchange of India Limited, (NMCE)

Table 5: Commodities Traded in Value from 2009-10 to 2013-14 in NMCE

COMMODITIES 2009-10





Value in Cr.

RAPE/MUSTARD

SEED

26577.73

(11.66)

-- --

-- 17024.17

(11.14)

COFFEE REP BULK -- -- -- 19425.91

(11.00)

13807.78

(9.04)

RAW JUTE -- -- -- 18375.45

(10.41)

20248.24

(13.25)

SACKING 24238.77

(10.64)

16734.57

(7.66)

-- 13677.73

(7.75)

--

SOY OIL 22364.15

(9.81)

-- 19739.18

(7.36)

-- --

GUAR SEED 18579.55

(8.15)

-- -- -- --

CASTORSEED -- -- -- -- 18916.78

(12.38)

CHANA 14851.26

(6.52)

--

-- -- 15264.09

(9.99)

RUBBER -- 23846.36

(10.92)

-- -- --

COPPER -- 15256.03

( 6.99)

21828.00

(8.13)

-- --

ZINC -- -- 22051.21

(8.22)

-- --

NICKEL -- -- 23344.45

(8.70)

13792.38

(7.81)

--

LEAD -- 14787.23

(6.77)

-- -- --

ALUMINIUM 5 MT -- 14711.08

(6.74)

23094.26

(8.61)

14850.14

(8.41)

--

OTHERS 121290.02

(53.22)

133075.63

(60.93)

158293.85

(58.99)

96449.25

(54.62)

67557.95

(44.21)

TOTAL 227901.48

(100.00)

218410.904

(100.00)

268350.948

(100.00)

176570.86

(100.00)

152819.01

(100.00)


The table clearly shows the National Multy commodity

exchanges in the total value of trade from the year 2009-

10 to 2013-14. NMCE Commodity market Rape/Mustard

Seed, Sacking, Soya Oil, Guar Seed, Chana and other

commodities were traded during the year 2009-10. The

total value of trade increased from 227901.48 crore in

2009-10 to Rs 268350.948 crore in 2011-12, whereas

value of trade decreased 176570.86 crore to 152819.01

crore from 2012-13 to 2013-14. Lead was traded in the

year 2010-11. Coffee Rep Bulk and Raw Jute were traded

in both 2012-13 and 2013-14 years. Rubber was traded

only in the year 2010-11 where as Zinc was traded only in

the year 2011-12. Copper was traded in 2010-11 and

2011-12 while as Nickel is traded in 2011-12 and 2012-13.

Rape/Mustard seed, Coffee Rep Bulk, Raw Jute, Castor

seed, Chana and other commodities were traded only in

the year 2013-14.




10

IV. Indian Commodity Exchange Limited, (ICEX)

Table 6: Commodities Traded in Value from 2009-10 to 2013-14 in ICEX

COMMODITIES 2009-10





Value in Cr.

GOLD 58778.43

(43.08)

153.71

(40.54)

90740.917

(35.16)

19929.17

(11.73)

--

CRUDEOIL 28946.04

(21.22)

67769.65

(17.94)

38960.007

(15.09)

41705.67

(24.55)

--

COPPERCATHODE 27889.39

(20.44)

65107.26

(17.24)

36902.468

(14.30)

-- --

SILVER 17964.24

(13.17)

83974.04

(22.23)

74714.559

(28.95)

28518.63

(16.79)

6550.87

(7.65)

COPPER -- -- -- 27210.31

(16.02)

--

IRON ORE -- -- -- 12281.65

(7.23)

8040.08

(9.39)

RSO 1136.43

(0.83)

-- -- -- --

NATURAL GAS 1023.37

(0.75)

-- -- 31155.14

(18.34)

11229.92

(13.11)

CASTOR SEED -- -- -- -- 9972.41

(11.64)

LEAD 607.74

(0.45)

-- -- --

GUARSEED 79.72

(0.06)

--

-- --

MUSTARD SEED -- -- 6642.876

(2.57) -- 14285.21

(16.68)

SOYBEAN -- -- -- -- 7574.28

(8.84)

OTHER -- 160725.22

(2.06)

10144.845

(3.93)

9096.57

(5.34)

28011.43

(32.70)

TOTAL 136425.36

(100.00)

377729.88

(100.00)

258105.672

(100.00)

169897.14

(100.00)

85664.19

(100.00)


The value of trade increased 136425.36 crore to 37729.88

crore from 2009-10 to 2010-11, whereas value of trade

decreased 258105.672 crore to 85664.19 crore from 2011-

12 to 2013-14. The ICEX Commodity exchange Gold,

Crude oil, Copper cathode, Silver, RSO, Natural Gas,

Lead, Guarseed were traded in 2009-10. Copper was

traded only in 2012-13 where as Iron Ore, and Natural gas

were traded in both 2012-13 and 2013-14 years. Silver

Iron Ore, Natural gas Castor seed, Mustard seed, Soya

bean and other commodities were traded in 2013-14.

Castor seed and Soya bean were traded in 2013-14.




11

V. Ace Derivatives and Commodity Exchange Limited, (ACE)

Table 7: Commodities Traded in Value from 2009-10 to 2013-14 in ACE

COMMODITIES 2009-10





Value in Cr.

REFSOYOIL -- 14455.775

(48.09)

70358.048

(50.74)

133889.20

(77.84)

13634.36

(29.16)

SOYBEAN -- 6436.805

( 21.42)

24632.606

(17.77)

22867.91

(13.29)

4946.16

(10.58)

SOYMEAL -- -- -- 8363.67

(4.86)

--

CPO -- -- -- -- 4852.12

(10.38)

MUSTARD -- 4393.967

(14.62)

17675.425

(12.75)

-- --

CHANA -- 3035.435

(10.10)

15727.664

(11.34)

-- --

GUAR SEED -- -- 6876.030

(4.96)

-- --

CASTOR -- 1462.830

(4.87)

-- -- 840.43

(1.80)

SUGAR -- 272.221

(0.91)

-- -- --

COTTON118 -- -- -- 3709.62

(2.16)

21004.34

(44.92)

RBD -- -- -- 3024.54

(1.76)

--

OTHER -- -- 3384.835

( 2.44)

155.25

(0.09)

1479.33

(3.16)

TOTAL 0.00

(0.00)

30057.033

(100.00)

138654.608

(100.00)

172010.18

(100.00)

46756.74

(100.00)


ACE Commodity Exchange was commencement in 2010.

The table shows the increased absolute terms the years

from 2010-11 to 2012-13 of commodity futures market in

India. The total value of trade increased from 30057.033

crore in 2010-11 to Rs 172010.18 crore in 2012-13 and

then decreased 46756.74 crore in 2013-14. The percentage

share of Refsoyoil to total value of commodities traded

increased 48.09% to 77.84% from 2010-11 to 2012-13 and

then decreased to 29.16% in 2013-14; whereas share of

value of Soyabean decreased from 24.42% to 10.58%

from the year 2010-11 to 2013-14. ICEX Market Ref soy

oil, Soybean, Mustard, Chana, Castor, and Sugar were

traded in the year 2010-11. Guar seed was trade in 2011-

12. Soya Meal and RBD was traded in 2012-13 while as

CPO was traded only in the year 2013-14. ACE

commodity exchange Ref Soy Oil, Soya bean, CPO,

Castor Cotton118 and other commodities were traded in

the year 2013-14.

VI. Universal Commodity Exchange Limited,

(UCX) Universal Commodity Exchange Ltd.,, (UCX)

Mumbai, was set up in 2012. It is the India’s 6th

National

Commodity Exchange. The total value of trade for the

financial year was 73013.19 crore in 2013-14. The

percentage share of Chana was the total value of trade

22.62% and second place was Kilo Gold with share

17.67%; whereas share of Rape/Mustard seed was 15.54%

in 2013-14.




12

9. CONCLUSION

The present study is an investigation into the present

status, growth and developmental policy alternatives for

commodity exchanges in India. India is traditionally an

agrarian economy; therefore, instability of commodity

prices has always been a major concern of the producers

as well as the consumers. In India, two-third of the one

billion populations depends on agricultural commodities.

Commodity futures markets are a part and parcel of a

program for agricultural liberalization. Many agricultural

economists understand the need of liberalization in the

sector. Futures markets are on instrument for achieving

that liberalization. However the recent attempt by the

Government to permit National level Multi-Commodity

Exchanges has indeed given it, a shot in the arm-

commodity includes all kinds of goods. The present study

is carried out with respect of all six National level

commodity exchanges in India namely NMCE,

Ahmadabad; MCX, Mumbai; NCDEX, Mumbai; ICEX,

Mumbai; ACE, Ahmadabad; and UCX, Mumbai. These

exchanges are playing very important role in the trading

activities in India. MCX is India’s No. 1 commodity

exchange.

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