Commodity Exchanges in Commodity Markets of India

International Journal of Management and Social Sciences Research (IJMSSR)
Volume 4, No. 12, December 2015
ISSN: 2319-4421
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, Indias 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 worlds largest futures 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
governments 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-Explore International Research Journal Consortium
(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).
www.irjcjournals.org

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 prereform 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
ISSN: 2319-4421
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

INDIAN COMMODITY EXCHANGES
OF
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,

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
ISSN: 2319-4421
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 Indias 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:

ISSN: 2319-4421
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
A.
1
2
3
4
5
6
Name of the Exchanges

National Exchanges
Multi Commodity Exchange of India Ltd., (MCX)
National Commodity & Derivatives Exchange of India Ltd., (NCDEX)
National Multi Commodity Exchange of India Ltd., (NMCE)
Indian Commodity Exchange Ltd., (ICEX)
Ace Derivatives and Commodity Exchange Ltd., (ACE)
Universal Commodity Exchange Ltd., (UCX)

ISSN: 2319-4421
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., Indias first state-of art demutualised,
electronic, multicommodity 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 multicommodity 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

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
ISSN: 2319-4421
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
ACE
2009-10
Value in Cr.
6393302.17
(82.34)
917584.71
(11.82)
227901.48
(2.94)
136425.36
(1.76)
--
UCX
--
MCX
NCDEX
NMCE
ICEX
2010-11
Value in Cr.
98,41,502.90
(82.36)
14,10,602.21
(11.81)
2,18,410.90
(1.83)
3,77,729.88
(3.16)
30,059.63
(0.25)
--
89540.33
70636.83
(1.14)
(0.59)
GRAND
7764754.050
11948942.35
TOTAL
(100.00)
(100.00)
Source: www.fmc.gov.in (Forward Markets Commission)
Others
The table clearly shows the share of various commodity

exchanges in the total value of trade from the year 200910 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 201213, similarly share in value of trade decreased 84.89% in
2013-14. While the NDEX exchange share in value of
2011-12
Value in Cr.
15597095.47
(86 .05)
1810210.1
(9.99)
268350.95
(1.48)
258105.67
(1.42)
`138654.61
(0.7 6)
--
2012-13
Value in Cr.
14881057.12
(87.00)
1598425.87
(10.00)
176570.86
(1.00)
169897.14
(1.00)
172010.18
(1.00)
--
53686.98
(0.30)
18126103.78
(100.00)
48878.92
(0.01)
17046840.09
(100.00)
2013-14
Value in Cr.
8611449.07
(84.89)
1146328.09
(11.30)
152819.01
(1.51)
85664.19
(0.84)
46756.74
(0.46)
73013.19
(0.72)
28764.69
(0.28)
10144794.98
(100.00)
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 201314 followed by NCDEX, NMCE, and ICEX.

ISSN: 2319-4421
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.
2010-11
Value in Cr.
2011-12
Value in Cr.
2012-13
Value in Cr.
2013-14
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 201112, 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 201112. Aluminium was traded in during 2012-13 and 201314. 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.

ISSN: 2319-4421
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
GUAR GUM
2009-10
Value in Cr.
98926.85
(10.78)
136651.76
(14.89)
258031.27
(28.12)
--
2010-11
Value in Cr.
101645.48
(7.21)
260362.79
(18.46)
246283.33
(17.46)
--
CRUDE OIL
--
CHANA
106295.87
(11.58)
84778.79
(9.24)
--
193090.55
(13.69)
112736.16
(7.99)
87161.91
(6.18)
--
2011-12
Value in Cr.
122637.796
(6.77)
415762.053
(22.97)
323119.643
(17.85)
98356.672
(5.43)
86225.698
(4.76)
274604.955
(15.17)
165405.051
(9.14)
--
--
--
80460.50
(5.70)
--
--
--
--
--
--
--
--
--
--
SOYABEAN
SOYA OIL
GUAR SEED
RAPE MUSTARD
SEED
CASTOR SEED
TURMERIC
PEPPER
JEERA
DHANIYA
COTTONSEED
OILCAKE
KAPAS
79967.29
(8.71)
-33720.03
(3.67)
--
--
OTHER
119212.85
328861.49
(13.01)
(23.31)
TOTAL
917584.71
1410602.21
(100.00)
(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
324098.228
(17.91)
1810210.096
(100.00)
2012-13
Value in Cr.
217991.11
(13.64)
557601.60
(34.88)
--
2013-14
Value in Cr.
182336.33
(15.91)
269914.56
(23.55)
--
--
--
--
--
159492.63
(9.98)
180196.82
(11.27)
93828.42
(5.87)
33083.60
(2.07)
--
132966.22
(11.60)
84217.51
(7.35)
161068.66
(14.05)
29606.19
(2.58)
--
65955.89
(4.13)
52828.99
(3.31)
65460.34
(4.10)
36775.61
(2.30)
135210.86
(8.46)
1598425.87
(100.00)
28917.50
(2.52)
95259.02
(8.31)
51044.17
(4.45)
35461.41
(3.09)
75536.52
(6.59)
1146328.09
(100.00)
decreased from 10.78% to 6.77% from 2009-10 to 201112 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.

ISSN: 2319-4421
III. National Multi Commodity Exchange of India Limited, (NMCE)

Table 5: Commodities Traded in Value from 2009-10 to 2013-14 in NMCE
COMMODITIES
RAPE/MUSTARD
SEED
COFFEE REP BULK
2009-10
Value in Cr.
26577.73
(11.66)
--
2010-11
Value in Cr.
--
2011-12
Value in Cr.
--
2012-13
Value in Cr.
--
--
--
RAW JUTE
--
--
--
SACKING
24238.77
(10.64)
22364.15
(9.81)
18579.55
(8.15)
--
16734.57
(7.66)
--
--
19425.91
(11.00)
18375.45
(10.41)
13677.73
(7.75)
--
RUBBER
14851.26
(6.52)
--
COPPER
--
ZINC
SOY OIL
GUAR SEED
--
19739.18
(7.36)
--
--
2013-14
Value in Cr.
17024.17
(11.14)
13807.78
(9.04)
20248.24
(13.25)
---
--
--
--
--
--
--
--
--
--
--
--
--
NICKEL
--
--
--
13792.38
(7.81)
--
--
LEAD
21828.00
(8.13)
22051.21
(8.22)
23344.45
(8.70)
--
--
--
23846.36
(10.92)
15256.03
( 6.99)
--
18916.78
(12.38)
15264.09
(9.99)
--
23094.26
(8.61)
158293.85
(58.99)
268350.948
(100.00)
14850.14
(8.41)
96449.25
(54.62)
176570.86
(100.00)
--
CASTORSEED
CHANA
14787.23
(6.77)
ALUMINIUM 5 MT
-14711.08
(6.74)
OTHERS
121290.02
133075.63
(53.22)
(60.93)
TOTAL
227901.48
218410.904
(100.00)
(100.00)
The table clearly shows the National Multy commodity
exchanges in the total value of trade from the year 200910 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
--
67557.95
(44.21)
152819.01
(100.00)
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.

ISSN: 2319-4421
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.
2010-11
Value in Cr.
2011-12
Value in Cr.
2012-13
Value in Cr.
2013-14
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 201112 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.
10

ISSN: 2319-4421
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.
2010-11
Value in Cr.
2011-12
Value in Cr.
2012-13
Value in Cr.
2013-14
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 201112. 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 Indias 6 th 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.
11

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 armcommodity 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 Indias No. 1 commodity
exchange.
REFERENCES
[1] G. Anuradha and Bohra Dimple (2012) Optimizing
and analyzing returns in commodity trading using
Genetic Algorithm, Simulated Annealing and a
novel algorithm ( GaSa) , International Journal of
Emerging Technology and Advanced Engineering,
ISSN No: 2250-2459, Volume 2, Issue-12,
December 2012, pp. 662-666.
[2] Takeshi INOUE and Shigeyuki HAMORI (2012)
Market Efficiency of Commodity Futures in India

Published by Institute of Developing Economies
(IDE), IDE Discussion Paper No, 370, October
2012, pp. 2-8.
[3] S. Selvanathan and V. Manohar (2013) Online
trading- An Insight to Commodities Trade with
Special Reference to India, Journal of Business
Management and Social Science Research
(JBM&SSR), ISSN: 2319-5614, Volume 2, No. 6,
June 2013, pp. 75-83.
[4] M. Venkateswari and G. Ravindran (2014)
Commodity Derivatives exchanges in India: A

Select Exchanges International Journal of
Marketing, Financial Services and Management
Research, ISSN No: 2277-3622, Volume 3 (2),
February 2014, pp. 28-32.
[5] Varadi Vijay Kumar (2012) An evidence of
speculation in Indian commodity markets
published by Munich Personal RePEc Archive
(MPRA), ICRIER, New Delhi, MPRA Paper No.
ISSN: 2319-4421
38337, POSTED 24, April 2012 12:31 UTC, pp. 114.

[6] Kerala Agricultural University(2011) Commodity
Futures Marketing: A primer published by
Agricultural Market Intelligence Centre (AMIC),
Department of Agricultural Economics, Kerala
Agricultural University Thrissur, AMIC Infoseries7,
date:
10/11/11,
available
at
http://www.kau.edu/amic/AMIC%20Infoseries%20
7.pdf.
[7] Ravi Sunitha (2013) Price Discovery and Volatility
Spillover in Indian Commodity Futures Markets
Using Selected Commodities PARIPEX-Indian
Journal of Research, ISSN No: 2250-1991, Volume
2, Issue 12, December 2012, pp. 128-13.
[8] Baskara M. (2007) Commodity Futures Trading in
India: A Role of National Commodity Exchanges ,
MBA (Agribusiness) thesis (published), University
of Agricultural Sciences, Dharwad, Department of
Agricultural
Marketing
Co-operation
and
Agribusiness Management.
[9] Ghosh M. (2011) Agricultural Policy Reforms and
Spatial Integration of Food Grain Markets in India,
Journal of Economic Development, Volume 36,
Number 2, June 2011, pp. 15-37.
[10] Sharma K R S (2013) A Study of Commodity
Futures in India A peer reviewed international
journal, ISSN No. 2320-5504, Vol. No: 2, Issue 4,
June 2013, pp. 1-9.
[11] G. Selvalakshmi and A. Arumugam (2014) Impact
of Price Level Changes in Indian Commodity
Market GRA- Global Research Analysis, Research
Paper, ISSN No.2277-8160, Volume 3, Issue-4,
April 2014.
[12] Dr. Shree Bhagwat, Angad Maravi, Ritesh Omre,
and Deepak Chand (2015) Commodity Futures
Market in India: Development, Regulation and
Current
Scenario,
Journal
of
Business
Management & Social Sciences Research, Volume
4, No.2, February 2015.
[13] Dr. Shree Bhagwat, Angad Maravi, Ritesh Omre,
and Deepak Chand (2015) A Study of Historical
Background of Indian Commodity Market, EPRA
International Journal of Economic and Business
Review, Volume 3, Issue-3, March 2015.
[14] S. S. Prasad Rao and Ravi Radhika (2011)
Commodity Market with Reference to Gold at

Inter-connected stock Exchange of India Limited
International Conference on Technology and
Business Management, GITAM University, March
28-30, 2011.
[15] Chatnani Niti Nandini (2010) Commodity
Markets:
Operations,
Instruments,
and
Applications Tata McGraw Hill Publications, New
Delhi, ISBN-13:978-0-07-015929-7 & ISBN-10:007-015929-7, First Edition-2010, pp. 52-65.
12

ISSN: 2319-4421
[16] Velmurugan. PS, P. Palanichamy & V. Shunmugam

(2010) Indian Commodity Market Derivatives
and Risk Management Serials Publications, New
Delhi, ISBN: 978-81-8387-383-3, pp. 103-117.
[17] R. T. Nirmal Kumar and Balaji. K (2011) An
Emperical Investigation on the Investors
Perception towards Commodities Futures Trading
in India with Special Reference to Puducherry,
India ZENITH International Journal of Business
Economics & Management Research Volume 1
Issue 2, Nov. 2011, ISSN 2249- 8826, pp. 175-189.
[18] Shende, N. V (2015) Future Trading of
Agricultural Commodities in India IJSR International Journal of Scientific Research,
Volume 4, Issue-7, July 2015, ISSN: 2277-8179,
pp. 462-465.
[19] S Poornima, and Deepthy K (2015) Commodity
Market in India International Journal of
Multidisciplinary Research and Development,
Online ISSN: 2349-4182 Print ISSN: 2349-5979,
Volume 2; Issue 11; November 2015, pp. 31-35.
[20] Dr. Shree Bhagwat and Angad Singh Maravi (2015)
The Role of Forward Markets Commission in
Indian Commodity Markets, International Journal
of ResearchGRANTHAALAYAH, ISSN-23500530 (O) ISSN-2394-3629 (P), Vol. 3, Issu 11,
November, 2015.
[21] Singh Saurabh Commodity Trading and its
Implications on Indian Economy College of
Agribusiness Management, G. B. Pant University of
Agriculture and Tech., Pantnagar , pp. 1-11
(accessed on 30-11-2015).
[22] Parmar Chetna An analytical study on volatility on
selected commodities: Bullions, Metals & Energy:
Black
Schools
Model,
http://www.researchgate.net/259973424 (accessed
on 30-11-2015).
13

Commodity Exchanges in Commodity Markets of India

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Commodity Exchanges in Commodity Markets of India

Uploaded by

Copyright:

Available Formats

International Journal of Management and Social Sciences Research (IJMSSR)

Volume 4, No. 12, December 2015