What                          is                     a                       Commodity?A commodity may be defined as an ar...
Multi Commodity Exchange of India Limited (MCX) and National Multi CommodityExchange of India Limited (NMCEIL).All these t...
Commodity exchanges have brought Indian buyers and seller in an equal importance to tradeand to do business swiftly.NCDEX ...
chilli, coriander, pulses, chana, fibres, V-787 Kapas, Shankar Kapas, cereals, wheat, barley,maize-feed/industrial grade. ...
Yellow Peas     Yellow Red Maize     Yellow Soybean Meal.Bullion -     Gold 1 KG     Gold 100gm     Silver 30 KG     Silve...
Multi Commodity Exchange (MCX)Multi Commodity Exchange is a commodity exchange based in Mumbai, the financial capital  of ...
Email: info@mcxindia.com                     Website: www.mcxindia.comNMCE (National Multi-Commodity Exchange of India Ltd...
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Commodity mrket assignment

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Commodity mrket assignment

  1. 1. What is a Commodity?A commodity may be defined as an article, a product or material that is bought and sold. Itcan beclassified as every kind of movable property, except Actionable Claims, Money & SecuritiesWhat is Commodity Exchange?Commodity Exchange is a common platform or institution, where market participants fromvaried spheres trade in a wide spectrum of commodity derivatives, just as how stock marketsprovide space for trading in equities and their derivativesWhich is the regulatory body for commodities trading?The Forward Markets Commission (FMC) is the regulatory body forcommodity futures / forward trade in India. You can mail them atfmc@bom5.vsnl.nic.in and visit their website at www.fmc.gov.in.In India there are 25 recognized commodity exchanges operating actively. Within them 18commodity exchanges are domestic future exchanges. But, three of them are known asnational level multi commodity exchanges in India.Commodities exchanges in India engage to trade in particular commodities. This trade doesnot comprise trade of securities, trade of stock index futures, trade of options and othermarket trading. The concept for commodity exchanges started in 19th century in UnitesStates for buying and selling commodities. It took almost three decades for government ofIndia to allow commodity exchanges in India.Through commodity exchanges in India buying and selling of commodities are exclusivelydone for the sub-continent. Commodity exchanges in India provide an easy platform forIndian businessmen to buy and to sell commodities by organizing market forums.Commodity exchanges are like central market hub which provides a single meeting place forIndian buyers and sellers. Through this central market hub, Indian buyers and sellers also setquality and quantity standards of the commodities. Establishment of business rules andregulations are done to satisfy the interests of the businessmen.Various types of commodities are traded through commodity exchanges in India.Agricultural commodities are also traded with full interests from traders. Commodityexchanges in India also bring exclusive report on storing, pricing and transfer of everycommodity. This is done by managing various fields of market to stop any chaotic condition(economic depression) in market commodities which might affect by worse economic factors.In India there are 25 recognized commodity exchanges operating actively. Within them 18commodity exchanges are domestic future exchanges. But, three of them are known asnational level multi commodity exchanges in India. These three sophisticated commodityexchanges in India are National Commodity & Derivatives Exchange Limited (NCDEX),
  2. 2. Multi Commodity Exchange of India Limited (MCX) and National Multi CommodityExchange of India Limited (NMCEIL).All these three commodity exchanges go online for Indian businessmen. They are designedand modified on the basis of traditional business platform called “Adhat” and “VaydaVyapar”. This is done to provide better risk coverage proficient delivery of commodities forIndian businessmen. Government of India takes ultimate control on all the above-mentionedcommodity exchanges in India under Forward Market Commission (FMC).National Multi Commodity Exchange of India Limited (NMCEIL) which is the first onlinemulti-commodity exchange in India that goes through demutualization. The first grantedapproval was given to NMCEIL to start trading with edible oil on 25th July, 2001. From 26thNovember, 2002, NMCEIL becomes an active part of commodity exchanges in India throughvarious commodities. NMCEIL promotes commodities through its supporting managinginstitutions. This support exclusively include Central Warehousing Corporation (CWC),National Agricultural Cooperative Marketing Federation of India Limited (NAFED), GujaratAgro Industries Corporation Limited (GAIC), National Institute of Agricultural Marketing(NIAM), Gujarat State Agricultural Marketing Board (GSAMB) and Neptune OverseasLimited.National Commodity & Derivatives Exchange Limited (NCDEX) has started its commodityexchange operation from 15th December, 2003. This is the single and only commodityexchange which is exclusively promoted and supported by institutions of national level.These national level supportive institutions include ICICI Bank Limited, Life InsuranceCorporation of India (LIC), National Bank for Agriculture and Rural Development(NABARD), National Stock Exchange of India Limited (NSE), Punjab National Bank (PNB),CRISIL Limited, Indian Farmers Fertilizer Cooperative Limited (IFFCO) and Canara Bank.NCDEX is a public limited company, located in Mumbai, India’s commercial hub.Multi Commodity Exchange of India Limited (MCX) also has its headquarter in Mumbai. Itprovides online trading, clearing and settlement operations across the sub-continent. MCXhas acquired permanent recognition from government of India and is known as anindependent commodity exchange. MCX has also gone through demutualization process andstarted commodity trading in the month of November, 2003. MCX has strategic alliance withPulses Importers Association, Bombay Bullion Association, Solvent Extractors’ Associationof India, Bombay Metal Exchange and Shetkari Sanghatana. Key shareholders of MCX areState Bank of India, Union Bank of India, Financial Technologies (India) Ltd., Canara Bank,Corporation Bank and Bank of India.Commodity exchanges in India play a crucial role in India’s economic development andgrowth. If price of any commodity is not fixed then commodity exchanges determines theprice of that particular commodity in an organized way. The price is determined examiningright from grassroots level and it goes through producers, retail investors and even end-users.
  3. 3. Commodity exchanges have brought Indian buyers and seller in an equal importance to tradeand to do business swiftly.NCDEX ( National Commodity and Derivatives Exchange of India Ltd.),MumbaiAs internet has brought the world closer, on-line marketing and selling is taking place all overthe world. One of them in India is National Commodity & Derivates Exchange Limited(NCDEX). It is an on-line multi-commodity exchange which is being managed byprofessionals. NCDEX? Shareholders comprises of a lot many national level institutions,public sector banks and various companies. On 23rd April 2003 the company was launchedunder the Companies Act, 1956 and on 15th December 2003 its operation started. It is beingpromoted by national level institutions and has a Board of Directors and professionals who donot have interest in commodity markets. NCDEX received its Certificate for Commencementof Business on 9th May 2003. ICICI Bank Ltd, LIC of India, NABARD and NSE are itspromoter shareholders. Some of other shareholders of NCDEX are Canara Bank, PunjabNational Bank, CRISIL Ltd., Indian Farmers Fertiliser Cooperative Ltd., Goldman Sachs,Intercontinental Exchange, Shree Renuka Sugar Ltd, Build India Capital Advisors LLP andCapital Services Ltd. FMC found NCDEX guilty of violating norms for price and thus on3rd February 2006 one of its executive was sacked.NCDEX has its head office in Mumbai and has more than 550 centres all over India. Mr. R.Ramaseshan is the Managing Director and CEO of NCDEX. He is being assisted by ChiefBusiness Officer, Chief Operations & Technology, Chief Compliance Officer, ChiefCorporate Services and Risk Management staff. Mr. J. Sampath (Chief Compliance Officer),Mr. Nirmalendu Jajodia (Chief Technology Officer), Mr. M.K. Ananda Kumar (ChiefCorporate Services) and Mr. Vijay Kumar (Chief Business Officer) assist Mr. R. Ramaseshanin operating NCDEX. The Board of directors of NCDEX India has the responsibilities likeorganizing, maintaining, controlling, managing, regulating and facilitating various operationsof the Exchange and of commodities by trading members and/or clearing members which aresubject to the provisions of the Forward Contracts (Regulation) Act 1952. The Board ofDirectors appoints one or more executive committee for various responsibilities to handle thefunctioning of NCDEX. It is being regulated by Forward Markets Commission and issubjected to various laws like Forward Contracts (Regulation) Act, Companies Act, ContractAct, Stamp Act and many more.NCDEX is the only an economic good exchange in the country which is being promoted bynational level institutions. This online exchange is able to provide information of the productswhich are in shortage in the market. The promoters and shareholders of NCDEX areexperienced players in their respective fields and thus are able to pool up their resources,trust, technology and risk management skills to maintain NCDEX. NCDEX is a platformwhere market participants for trading are able to get the best practices by best professionalsfrom all over the world and these trading practices are transparent.Facilities Offered At NCDEXNCDEX provides information product of agricultural commodity index which is calledNCDEXAGRI and this includes about 20 commodities. NCDEX offer these 20 commoditiesare for trading. NCDEX offers two types of products Agricultural products and non-agricultural products. Agricultural products includes rubber, pepper, spices, turmeric, jeera,
  4. 4. chilli, coriander, pulses, chana, fibres, V-787 Kapas, Shankar Kapas, cereals, wheat, barley,maize-feed/industrial grade. NCDEX provides information product, the index futures, knownas FUTEXAGRI which indicates that if future on the index is being traded then currentFUTEXAGRI value will be somewhere near no-arbitrage value for the future index. Theseare available for information only and not for trading. NCDEX has appointed clearing bankswhich acts as funds settling agency for all deals which are cleared through exchange and/orany other funds transaction between clearing members and the clearing house and betweenclearing members.NCDEX online exchange is one of the best facility available for online traders.Commodities Traded at NCDEXNCDEX currently facilitates trading of 57 commodities - Agri-based commodities - Castor Seed Chana Chilli Coffee - Arabica, Coffee - Robusta Cotton Seed Oilcake Crude Palm Oil Expeller Mustard Oil Groundnut (in shell) Groundnut Expeller Oil Guar gum Guar Seeds Gur, Jeera Jute sacking bags Kidney Beans Indian 28 mm Cotton Indian 31 mm Cotton Masoor Grain Bold Medium Staple Cotton Mentha Oil Mulberry Green Cocoons Mulberry Raw Silk Rapeseed - Mustard Seed Pepper Raw Jute RBD Palmolein Refined Soy Oil Rubber Sesame Seeds Soy Bean Sugar - Small Sugar - Medium Turmeric Urad (Black Matpe) V-797 Kapas
  5. 5. Yellow Peas Yellow Red Maize Yellow Soybean Meal.Bullion - Gold 1 KG Gold 100gm Silver 30 KG Silver 5 KGEnergy - Brent Crude Oil Furnace Oil Light Sweet Crude OilFerrous Metals- Mild Steel IngotPlastics- Polypropylene Linear Low Density Polyethylene Polyvinyl Chloride.Non-Ferrous Metals- Aluminium Ingot, Copper Cathode Nickel Ingot Zinc CathodeDefinition of National Commodities And Derivatives Exchange - NCDEXIndias largest and most recognized commodities exchange, which was established in 2003.The exchange was founded by some of Indias leading financial institutions such as ICICIBank Limited, the National Stock Exchange of India and the National Bank for Agriculturaland Rural Development, among others.Investopedia explains National Commodities And Derivatives Exchange -NCDEXThe exchange is located in Mumbai, but has offices across the country to facilitate trade.Trading is done on 45 commodities that are integral to Indias economy. These include gold,silver, Brent Crude oil, and rice, along with other agricultural products and base metals.
  6. 6. Multi Commodity Exchange (MCX)Multi Commodity Exchange is a commodity exchange based in Mumbai, the financial capital of India. The MCX is a demutualized electronic multi commodity futures exchange, and enables future trading of various agricultural and non-agricultural commodities such asMetals, Pulses, Oils, Fiber, Energy, Petrochemicals, Plantations, Cereals, Bullion and Spicesetc. As of 31st of December, 2007, the exchange was offering futures trading in 55 different commodities. Established in November 2003 by Financial Technologies, the MCX holds a permanent recognition issued by the Government of India. Key Attributes Multi Commodity Exchange is said to be the most prominent commodity exchange in the country, and claimed 84% of the total commodity market share in the year 2008. Awarded with an ISO 9001:2000 accreditation for the quality standards maintained by it, MCX has partnered with ten renowned commodity exchanges of the world, including Tokyo Commodity Exchange, London Metal Exchange, Chicago Climate Exchange, New York Board of Trade, Bursa Malaysia Derivatives and New York Mercantile Exchange.In terms of futures trading on a global level, Multi Commodity Exchange reportedly holds the 1st rank in the trading of Silver, 2nd rank in Natural Gas and 3rd rank in Crude Oil and Gold commodities. Gold is the highest traded commodity upon the MCX and the average monthly turnover ofGold trading was around US$ 29 Billion as of May 2007, while the average daily turnover of the exchange was about US$ 2.4 billion. Nationwide Network Facing a competition from National Commodity & Derivatives Exchange Ltd. (NCDEX),Multi Commodity Exchange has a network of around 10,000 trading terminals spread across500 cities nationwide. The exchange also brings MCX COMDEX, which happens to be the only composite commodity futures price index existing in India. Social Activities Apart from playing a vital role in offering futures trading services to its customers nationwide, Multi Commodity Exchange also fulfils its social responsibilities, and duly follows its Corporate Social Opportunities (CSO) program. Under the CSO program, MCXhas taken a number of initiatives for various social causes. These initiatives include a GraminSuvidha Kendra (GSK), a Public Private Partnership (PPP) project in collaboration with India Post, and Pragati which is a project in partnership with Rotary International. Apart from it,MCX has also partnered with various non-profit entities such as M S Swaminathan Research Foundation, Tata Energy Research Institute (TERI) and Indian Society for Agribusiness Professionals (ISAP), to recognize its social responsibilities in an active way. Head Office Multi Commodity Exchange of India Ltd. Exchange Square, Suren Road, Andheri East, Mumbai - 400093, India. Tel. No. 6731 8888. Fax: 022 66494151
  7. 7. Email: info@mcxindia.com Website: www.mcxindia.comNMCE (National Multi-Commodity Exchange of India Ltd., Ahmedabad)

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