1. AN INSIGHT INTO
Commodity market
past ,present and future
CENTRAL UNIVERSITY OF RAJASTHAN(2013-2015) 1
7/24/2014
SURAJ KUMAR DIXIT
2013MCOM021
2. Outlines
Definition
Commodity – History (World)
Commodity – Uniqueness (CONTRIBUTION IN GLOBAL LANDSCAPE)
Classification ofCommodities
Commodity – History(India)
Indian Commodity Market Size
Commodities Offered forTrading
How to Invest
Commodities @Way2Wealth
Risk factor
conclusion
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3. Commodity - Definition
A commodity is any good or service produced by human labour
and offered as a product for general sale on the market
- Karl Max
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A commodity is anything for which there is demand, but which is
supplied without qualitative differentiation across a markets.
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Classification of Commodities
Commodities
Bullion
Gold
Silver
Palladium
etc
Energy
Crude oil
Heating oil
Natural gas
Furnace oil
Etc.
Base Metals
Copper
Zinc
Aluminum
Nickel
Tin
Agriculture
Grains
Pulses
Edible oils/seeds
Spices etc
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Wheat in your bread
Petrol in your vehicle
Coffee on your table
Sugar in your sweets
Chana in your chhole
Gold in your necklace
……… and so on …….
Commodities are everywhere
Commodities – in Real Life
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Indian Share in Global Commodity Market
91%
9%
Global India
Contribution in global landscape
Global Vs. India
Global commodity has relatively long history
Size is 9 times larger than India
India
Commodity futures, though active since 19th
century was banned later in 1970’s
Commodity volumes shoots up significantly
after re-launch in 2003
MCX emerged as world’s 4th largest exchange
Volumes on Indian exchanges are increasing
at CAGR of 73.7 percent
2009 2008
Global 14831317 11712611
India 1469673 1067984
CommodityTrading (Value in Million USD)
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Structure of Indian Commodity market
20 Other Regional Exchanges
NMCE
Commodity Exchanges
MCX
National
Exchanges
Regional
Exchanges
FMC –The Regulator
NBOTNCDEX
Leadership position with >90% share
MINISTRY OF CONSUMERAFFAIRS
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National Commodity and Derivatives Exchange
Type Private
Industry Business services
Founded 15 Dec ember 2003
Headquarters Mumbai , Maharashtra, India
Key people Samir Shah, MD (incharge)
Prod ucts Options /futures exchange
Website www.ncdex.com
NCDEX Of f ices
NCDEX has offices in Mumbai ,Delhi,Ahmedabad,Indore,Hyderabad,Jaipur and Kolkata.
National Commodity & Derivatives Exchange
Limited (NCDEX) is an online multi commodity
exchange based in India.It is a public limited company
incorporated on 23 April 2003 under the Companies Act ,
1956. It obtained its Certificate for Commencement of
Business on 9 May 2003. It has commen credits
operationson 15 December 2003.NCDEX is the only
commodity exchange in the country promoted by national
level institutions.
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Multi Commodity Exchange
Multi Commodity Exchange of India Ltd is an independent commodity
exchange based in India. It was established in 2003 and is based in Mumbai.
Headquarters: Mumbai, India
Founded: 2003 Type Public
Industry Business services
Founded 10 Nov. 2003
Headquarters Mumbai, India
Key people
ManojVaish, MD
and CEO
Products
Options/futures
exchange
Revenue
Rs 104.39 crore
(2005–2006)
Website www.mcxindia.com
The Multi Commodity Exchange of India Limited (MCX),
India’s first listed exchange, is a state-of-the-art,
commodity futures exchange that facilitates online
trading, and clearing and settlement of commodity
futures transactions, thereby providing a platform for risk
management.The Exchange, which started operations in
November 2003, operates within the regulatory
framework of the Forward Contracts (Regulation)Act,
1952.
MCX has been continuously raising the bar through
effective research and product development, intelligent
use of information and technology, innovation, thought
leadership and ethical business conduct
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How to Invest
Procedure for Trading in Commodities
• Open Demat & Trading A/C
Filling KYC (Know Your Customer)
Documents required : Pan Card, Address Proof, Networth, Cancelled cheque (MICR), Photo
etc
• To get familiar with this asset class, start reading research reports and monitor
advisory and execution
• Acquire full knowledge of risk involved in futures
Mark to Market
Daily Pay-in & pay-out
Margin requirements
Contract expiry & rollover
Leverage, profit & loss etc
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THE WORLD’S MAJOR COMMODITY FUTURES
EXCHANGES
2008 2007
Rank
1 1 New York Mercantile Exchange
(NYMEX, US)
2 3 Dalian Commodity Exchange
(DCE, China)
3 2 Chicago Board of Trade
(CBOT, US)
4 4 ICE Futures
(formerly IPE, UK)
5 9 Zhengzhou Commodity Exchange
(ZCE, China)
6 5 London Metals Exchange
(LME, UK)
7 7 Shanghai Futures Exchange
(SHFE, China)
8 10 Multi Commodity Exchange
(MCX, India)
9 1+++1 New York Board of Trade
(NYBOT, US)
10 6 Tokyo Commodity Exchange
(TOCOM, Japan)
11 8 National Commodity & Derivatives Exchange
(NCDEX, India)
12 13 Chicago Mercantile Exchange
(CME, US)
13 12 Tokyo Grain Exchange
(TGE, Japan)
14 15 Euronext.LIFFE (EU)
15 16 Central Japan Commodity
Exchange (C-COM, Japan)
16 17 Kansas City Board of Trade
(KCBT, US)
17 18 Winnipeg Commodity Exchange
(WCE, Canada)
18 19 Bursa Malaysia Derivatives
(BMD, Malaysia)
19 14 National Multi-Commodity
Exchange (NMCE, India)
20 20 JSE/SAFEX
(South Africa)
21 22 Brazilian Mercantile & Futures
Exchange (BM&F, Brazil)
22 21 Minneapolis Grain Exchange
(MGEX, US)
Exchange