A Study of Commodity Market V/S Multi Commodity · PDF filethe Dynamics of Commodity Derivative Market’s Impact on Indian ... escape from capital market ... in Indian Commodities

International Journal of Research in Management, Economics and Commerce

ISSN 2250-057X, Impact Factor: 6.384, Volume 6 Issue 04, April 2016

www.indusedu.org 27 [email protected]

A Study of Commodity Market V/S Multi Commodity Exchange of India

Limited (MCX)

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

The commodity market in India facilitates multi commodity exchange within and outside the

country based on requirements. The Multi Commodity Exchange of India Limited (MCX), is

located in Mumbai the financial capital of India. Multi Commodity Exchange of India Limited

India’s No. 1 commodity exchange has been given the efficient platform for price discovery and

risk management across a wide range of segments in India’s commodity futures market. It was

the first ever IPO by an Indian exchange and made MCX India’s only publicly listed exchange.

Earlier MCX was regulated by the Forward Markets Commission (FMC), which got merged with

the SEBI on September 28, 2015. MCX has been offering products and services with

specifications that perfectly meet the needs of its diverse customer base in a cost effective

manner. The innovations in MCX’s products and services facilitate users to hedge price risks in

international commodities within the country; thereby enabling they attain efficiency and

competitiveness without having to use a foreign exchange platform. MCX COMDEX is India's

first and only composite commodity futures price index. Other commodity indices developed by

the Company include MCXAgri, MCXEnergy and MCXMetal. The Exchange has an extensive

national reach, with 709 registered members, operating through more than 6,07,331 trading

terminals (including CTCL), spanning over 1800 towns and cities across India as at the end of

2015-16 (as on December 31, 2015). MCX is India’s leading commodity derivatives exchange

with a market share of 84.3% in terms of the value of commodity futures contracts traded in

2015-16, and the total value of trade was INR 555164431.86 Crore as at the end of the year

2015-16. MCX has several strategic alliances with global exchanges such as LME and NYMEX.

Keywords: Commodity Market, Commodity Exchanges, Multi Commodity Exchange Ltd., SEBI

Introduction

Trading in commodity derivatives/futures on exchange platforms is an instrument to

achieve price discovery and better price-risk management besides helping the macro economy

with better resource allocation. The Multi Commodity Exchange of India Limited (MCX) in

Mumbai is also an independent and de-metalized exchange recognized by the Government of

India. MCX commodity exchange which started operations in November 2003 has above 40

commodities on its platform and has a market share of around 80% in the Indian commodity

market. The MCX commodity exchange operates under the regulatory framework of Securities

and Exchange Board of India (SEBI). MCX commodity exchange facilitates online trading,

http://www.nirmalbang.com/




clearing and settlement operations for commodity futures market across the country. MCX offers

trading in varied commodity futures contracts across segments including bullion, ferrous and

non-ferrous metals, energy and agricultural commodities. The Exchange’s flagship index, the

MCXCOMDEX, is a real-time composite commodity futures price index which gives

information on market movements in key commodities. Other indices developed by the exchange

include MCXAgri, MCXEnergy, MCXMetal and Rainfall Indices. With an aim to seamlessly

integrate with the global commodities ecosystem, MCX has forged strategic alliances with

leading international exchanges such as CME Group, London Metal Exchange (LME), Dalian

Commodity Exchange (DCE) and Taiwan Futures Exchange (TAIFEX). The Exchange has also

tied-up with various trade bodies, corporate, educational institutions and R&D centers across the

country. These alliances enable the Exchange in improving trade practices, increasing awareness,

and facilitating overall improvement of the commodity market. The MCX Exchange has an

extensive national reach, with 709 registered members, operating through more than 6, 07,331

trading terminals (including CTCL), spanning over 1800 cities and towns across India as at the

end of 2015-16. MCX is India’s leading commodity derivatives exchange with a market share of

84.3% in terms of the value of commodity futures contracts traded in 2015-16.

MCX’s ability to use and apply technology efficiently is a key factor in the development

of its business. The exchange’s technology framework is designed to provide high availability

for all critical components, which guarantees continuous availability of trading facilities. The

robust technology infrastructure of the exchange, along with its with rapid customization and

deployment capabilities enables it to operate efficiently with fast order routing, immediate trade

execution, trade reporting, real-time risk management, market surveillance and market data

dissemination. MCX envision a unified Indian commodity market that is driven by market forces

and continually provides a level playfield for all stakeholders ranging from the primary producer

to the end-consumer; corrects historical aberrations in the system; leverages technology to

achieve exceptional efficiencies and ultimately lead to a common world market. MCX shall

accomplish the above vision by relentlessly endeavoring to enhance awareness and

understanding of exchange-enabled trade in commodity derivatives. The Exchange will continue

to minimize the adverse effects of price volatilities; providing commodity ecosystem participants

with neutral, secure and transparent trade mechanisms; formulating quality parameters and trade

regulations in conjunction with the regulatory authority. MCX is the largest and most diverse

commodity exchange in India offering more than 55 commodities across various segments. The

Multi Commodity Exchange of India Limited (MCX) is an independent commodity exchange of

India. It is India’s largest commodity derivatives trading platform, and the turnover of the

exchange for the year 2015-16 was 55.52 trillion rupees (865.55 billion US dollars). It has

reported a steep 57% increase in its daily average turnover (DAT) in November on huge price

volatility in non-agricultural commodities, where the exchange has a dominant position.

Objectives of the Study

To study the Development of Multi Commodity Exchange of India Limited.

To analyses the Performance of Multi Commodity Exchange of India Limited.




Review of Literature

Joseph Anto, K.G Suresh and Sisodia Garima (2015) in his work “Is the Causal

Nexus between Agricultural Commodity Futures and Spot Prices Asymmetric? Evidence from

India” examined the Agricultural commodity futures exchange provides a centralized

marketplace where the farmers and other market participants can discover the prices of

agricultural commodities for futures delivery and where risk-averse people can shift commodity

price risk to others, who are willing to bear it. In agricultural commodity markets, prices are

determined by fundamental supply and demand forces which are undergoing structural change

due to the increasing demand from the emerging economies, alternative uses of agricultural

commodities for energy production, and supply side constraints. They found that in this study

important implication for market participants and policy makers. Testing of asymmetric causality

after decomposing the information into positive and negative components would help market

participants to predict the price in the respective markets according to the nature of information

components. Parasuraman N. R. and Rao Ullas (2014) in his study “An Empirical

Examination of the Efficiency of Commodity Markets in India” investigate the postulate

surrounding market efficiency surrounding commodity markets using an empirical model

represented by the cost-of-carry. In order to support the veracity of the phenomena, we also

apply the cost-of-carry model to the equity markets. Both single hypothesis and joint hypothesis

tests reject the cost-of-carry model implying that in the absence of market efficiency,

arbitrageurs should be in a position to exploit the price differentials existing across futures and

spot prices in both commodity as well as equity markets in order to earn abnormal returns. While

arbitrageurs dealing in equities would be required to strictly operate within the rules enshrined by

the capital markets regulator (SEBI), the scope of scrutiny is by-far restricted to a greater degree

in commodities. Even while the commodity markets like Multi Commodity Exchange Ltd.

(MCX) are governed by Forward Markets Commission (FMC), in the absence of enactment of

long pending Forward Contract Regulation Act (FCRA) Amendment Bill, the regulator lacks the

requisite powers to exercise effective supervision over the operations surrounding commodity

markets. Vala Yuvrajsinh (2013) in his study “Is there any Link between Commodity Price

and Monetary Policy? Evidence from India” examine that the role of commodity indices in

predicting Gross Domestic Product (GDP), Inflation, Interest Rate and Money Supply in India,

on the basis of quarterly data from March 1997 to September 2012. Nine types of the commodity

price indices (ARMCI, BPCI, COM, FCI, FPCI, IIPCI, MPCI, NFCI, COPI) are used under this

study to examine whether any specific index is useful in predicting the variables under

consideration. Econometric analysis indicates that commodity price indices are helpful to predict

GDP and Inflation. The results of the study support Furlong (1989), Awokuse & Yang (2002),

Ocran & Biekepe (2007)), Hasan and Salim (2011) while it is also contadict with Polley &

Lombra (1999). The findings of the study can be helpful in important implication for monetary

authority. Empirical evidence provides that non-monetary information variables can be useful in

predicting some monetary variables. R.A. Prasad (2013) in his study “An Empirical Study on

the Dynamics of Commodity Derivative Market’s Impact on Indian Investment” investigated




the many people have become rich in the Commodity Markets, It is one of a few investment

areas where individuals with limited capital can make extra-ordinary profits in a relatively short

period of time and most of the people lose money, Commodity Market has a bad reputation as

being too risky for the average individuals. The truth is that Commodity trading is only as you

want to make it. Investors are consider the Commodity Derivatives Market as only a risk hedging

instrument, and also it is only a optional for investment escape from capital market losses , by

this reason Commodity Derivatives Market are not developed as compare to Capital Market.

Investor point of view it is alternative for minimizing the losses instead buy the insurance

scheme. Investors are not understood about Commodity Market, it is also one of the obstacles for

development of Commodity Derivatives market in India. Babu M. and Srinivasan S. (2012) in

his paper “Testing the weak form Efficiency in Indian Commodities Market” the study showed

that the Weak Form Efficiency and to find the relationship between Spot and Futures Prices in

Indian Commodity Markets. The daily data consisted of closing spot and futures prices which

were collected from mcxindia.com. The commodities, namely, Gold, Silver, Copper, Zinc, Crude

Oil, Natural Gas, Mentha Oil and Cardamom were used as samples. Descriptive Statistics,

Augmented Dickey Fuller Test, Runs Test and Johansen Co Integration Test were the primary

test for examining the Weak form Efficiency. The Unit Root Test revealed that all the sample

commodities returns attained stationary in the level. Runs Test show that the futures price

movements cannot be predicted using past prices for majority of commodities. Further, Johansen

Trace Statistic and Max-Eigen Value indicate that there was no long term relationship between

the spot and futures prices returns in the Multi Commodity Exchange India Ltd., (MCX). Verma

Ashutosh and C. V. R. S. Vijaya Kumar (2010) in his study “An Examination of the Maturity

Effect in the Indian Commodities Futures Market” examined the maturity effect for wheat and

pepper being traded at NCDEX. They found that the maturity effect is present in nearly half of

the contracts. The negative covariance between the net carry cost and spot price for pepper

contracts is comparatively less as compared to what is generally observed in the agricultural

commodities. The study findings indicate that the BCSS hypothesis is supported in these two

commodities, more strongly for wheat than for pepper. There is further scope for research in this

area in relation to other agricultural commodities and also metals. Further studies can also be

undertaken to find the informational efficiency and the reaction of informational flow to identify

the reasons for the presence or absence of maturity effect. Dummu Tata Rao (2009) in his study

“Commodity Futures Markets in India: Its Impact on Production and Prices” conducted a

study on commodity futures market. Commodity futures market has a limited presence in

developing countries. Historically, governments in many of these countries have discouraged

futures markets. If they were not banned, their operations have been constructed by regulation. In

the recent past, however, countries have begun to liberalize commodity market. And in a reversal

of earlier trends, the development of commodity future markets is being pursued actively with

support from governments. They found that the soya oil imports exercise a significant impact on

the basis and the impact varies with the extent of supplies that come from domestic production.

Thus, by these commonly used criteria, the soya oil contract has attracted hedging interest from




commercial firms. The one count on which the NBOT falls short of developed country

exchanges is that the NBOT contracts are open for trading for a shorter period of three months or

less. The study focuses on operating system and need of commodity derivative as well as

Condition of modern commodity exchanges and unresolved issues and future prospects. R.

Salvadi Easwaran and P. Ramasundaram (2008) in his work “Whether Commodity Futures

Market in Agriculture is Efficient in Price Discovery? - An Econometric Analysis” examined

the agriculture dominated economy, like India, the farmers face not only yield risk but price risk

as well. Commodity futures and derivatives have a crucial role to play in the price risk

management process, especially in agriculture. The study has investigated the futures markets in

agricultural commodities in India and has outlined the status of futures markets in agricultural

commodities in the Indian context. More specifically, this study has attempted to assess the

efficiency of futures market in India. They found that the econometric analysis of the

relationship between price, return, volume, market depth and volatility on a sample of four

agricultural commodities has shown that the market volume and depth are not significantly

influenced by the return and volatility of futures as well as spot markets. The price volatility in

the spot markets does not have any impact on the market conditions in futures markets.

Research Methodology

The present study is conducted commodity market in India with special reference to

Multi Commodity Exchange (MCX). The study is based on secondary data, which has been

collected from commodity market and their publications, books related topics, magazines,

reputed journals, research paper, news paper, and internet sources like www.mcxindia.com,

www.sebi.gov.in, commodity market bulletins, annual reports of Forward Markets Commission

(FMC), Securities and Exchange Board of India (SEBI), and other publications. The various

reports and records issues and maintained by the Government of India are also used in the study.

History of Multi Commodity Exchange of India Limited (MCX)

The history of commodities trading in India is quite robust. The derivatives and the

futures market for the commodity trading in India has opened up great avenues for retail

investors also. Commodity Futures trading in India started with the setting up of nation-wide

multi commodity exchanges, a new avenue has been thrown open for Indian investors. The

exchanges have electronic trading and settlement systems making it easy to trade in commodity

futures. The Multi Commodity Exchange of India Limited (MCX), India’s first listed commodity

exchange, is a state-of-the-art, commodity derivatives exchange that facilitates online trading,

and clearing and settlement of commodity futures transactions, thereby providing a platform for

risk management. The Exchange, which started online business operations in November 2003,

operates under the regulatory framework of Securities and Exchange Board of India (SEBI).

MCX has been certified with three ISO standards, ISO 9001:2008 Quality Management System,

ISO 27001:2013 Information Security Management Standard and ISO 14001:2004 Environment

Management Standard. MCX offers trading in varied commodity futures contracts across

segments including bullion, ferrous and non-ferrous metals, energy and agricultural

http://www.mcxindia.com/




commodities. The Exchange focuses on providing commodity value chain participants with

neutral, secure and transparent trade mechanisms, and formulates quality parameters and trade

regulations, in conformity with the regulatory framework. Key shareholders of MCX are

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 is the largest and most diverse commodity exchange

in India offering more than 55 commodities across various segments. MCX is the most efficient

and cost-effective platform for price discovery and price-risk management in commodity market

of India. The Exchange allows people to shift risks in the most economic manner possible. The

MCX is an independent commodity market which has a lot of commodities.

Key Milestones of Multi Commodity Exchange of India Limited (MCX)

1.2002-05

Incorporated in April 2002 under the name Multi Commodity Exchange of India private

Limited.

MCX Company received permanent recognition from the Ministry of Consumer Affairs,

Food and Public Distribution, Government of India in 2003.

Online futures trading operations commenced in November 2003.

MoU entered into between FTIL and NAFED to create a national level agricultural spot

exchange in 2004.

In 2005, launch of composite commodity futures index (MCX-COMDEX).

MCX entered into a license agreement with London Metal Exchange (LME) for the use

of the LME‘s official prices as the basis for settlement of certain futures contracts in 2005.

MCX Company entered into a MoU with the University of Mumbai for creating a chair

in its department of economics.

2. 2005-07

In June 2006, forged an alliance with the India Post to extend benefits of the exchange to

farmers through Gramin Suvidha Kendra, its social inclusion programme.

In June 2006, became India’s largest commodity exchange.

MCX Company signed a license agreement with NYMEX in 2006.

In 2006, MCX Company signed an agreement with Euro next LIFFE.

3. 2007-09

Euro next, NV., Alexandra GLG, Passport Capital, Merrill Lynch holdings, ICICI, Kotak

Mahindra, New Vermon, ILFS and Citigroup acquired stakes in MCX.

Launch of the Gujarati and Hindi version of website mcxindia.com by MCX in 2007.

MCX Company obtained ISO/IEC 27001: 2005 certification in 2008

In 2008, granted membership of the International Organization of Securities

Commissions (IOSCO).




MCX was recognized as? India‘s First Green Exchange? By Priyadarshini Academy.

4. 2009-14

Kotak Mahindra Bank Ltd. acquired 15% equity stake in company.

MCX Company released India‘s first Yearbook on Indian Commodity Ecosystem in

collaboration with Price water house Coopers in 2009.

MCX Company launched? Exchange of Futures for Physicals? (EFP) transactions in

2009.

In 2010, MCX Company was recertified to ISO 9001:2008 Quality Management System

standard by Bureau Veritas Certification (India).

MCX Company signed a MoU with Shanghai Futures Exchange in 2010.

In 2010, MCX company entered into an MoU with Taiwan Futures Exchange (TAIFEX)

to develop commodity futures market in India

MCX Company received the NASSCOM Foundation Social Innovation Honours in 2010.

In 2011, MCX is the world’s 5th

largest commodity futures exchange among all the

commodity exchanges considered in the Futures Industry Association survey in terms of the

number of futures contracts traded during the period January to June 2011.

Highest daily turnover of INR 1, 19,941 Crore achieved on April 15, 2013 (since

inception).

In 2014, MCX entered into the Master Amendment to Principal Agreements (Agreement)

with Financial Technologies (India) Limited (FTIL) to continue availing of technology support

& managed services from FTIL on such terms & conditions as contained therein.

World’s 3rd

largest commodity futures exchange in terms of the numbers of contracts

traded in CY2012.

Became India’s first listed commodity exchange on March 9, 2012.

India’s 1st commodity exchange to report its sustainability performance since FY 2009-

10.

5. 2015

MCX has been honoured with ‘Exchange of the Year for Investor Education and

Awareness Award’ by the Commodity Participants Association of India - May 2015.

MCX and CME Group sign Memorandum of Understanding - July 2015

(i) Joint viability study of International Finance Service Center in India to be

conducted

(ii) Existing licensing agreement on energy futures settlement prices renewed

MCX Signs MoU to establish an international exchange with India’s first International

Financial Services Center (IFSC) at GIFT City - August 2015.

6. 2016

Overcoming many hurdles, MCX climbs a rung to be world’s 6th

largest commodity

futures exchange in 2015, going by the number of commodities contracts traded.




MCX won the Best Commodity Exchange Award at the 14th

Commodity Futures Market

Summit & Excellence Awards, organized by ASSOCHAM - February 3, 2016.

Commodities Traded on Multi Commodity Exchange of India Limited (MCX)

Table 1: List of Commodities for Trading on Multi Commodity Exchange Ltd., (MCX)

Sr. No. List of Commodities Available for

Trading on MCX

List of Commodities Contracts

Available for Trading on MCX

A. Bullion

1

Gold

Gold

Gold Global

Gold Guinea

Gold Mini

Gold Petal

Gold Petal New Delhi

2

Silver

Silver

Silver 1000

Silver Mini

Silver Micro

B. Base Metals

3 Aluminium Aluminium

Aluminium Mini

4 Copper Copper

Copper Mini

5 Lead Lead

Lead Mini

6 Nickel Nickel

Nickel Mini

7 Zinc Zinc

Zinc Mini

C. Energy

8 Crude Oil Crude Oil

Brent Crude Oil

Crude Oil Mini

9 Natural Gas Natural Gas

D. Agri-Commodities

10 Cardamom Cardamom

11 Cotton Cotton

12 Crude Palm Oil Crude Palm Oil

13 Kapas Kapas

14 Mentha Oil Mentha Oil

Performance of Multi Commodity Exchange of India Limited (MCX)




Table 2: Commodities Traded Value (In Crore ) & Volume (In Lakh) on MCX (during the

year 2009-10 to 2015-16)

Years Volume (In Lakh) Value (In Crore)

2009-10 161173737 595665592.87

2010-11 197206801 869686959.57

2011-12 346192367 1493283651.58

2012-13 388751074 1489038761.90

2013-14 264627693 1073314717.17

2014-15 133751818 526148985.28

2015-16 216346961 555164373.86

Source: www.mcxindia.com

The table 2 clearly shows the performance of Multi Commodity Exchange of India Limited

(MCX) during the year 2009-10 to 2015-16. The total volume of trading in the MCX market

increased from Rs. 161173737 lakh in 2009-10 to Rs. 388751074 lakh in 2012-13; while volume

of trading decreased from Rs. 264627693 lakh in 2013-14 to Rs. 133751818 lakh in 2014-15,

and then volume of trading in MCX market increased Rs. 216346961 lakh in 2015-16. The total

of trade in MCX market rose from Rs. 595665592.87 crore in 2009-10 to Rs. 1493283651.58 in

2011-12; whreas value of trade continuously decreased from Rs. 1489038761.90 crore in 2012-

13 to Rs. 526148985.28 crore in 2014-15, and then value of trade in MCX market increased Rs.

555164373.86 crore in 2015-16.

Table 3: Performance of Commodities Groups wise Value of Trade (In Crore) on MCX

Yea

rs

Precious

Metals

Non-

Precious

Metals

Ferrou

s

Metals

Environme

ntal

Products

Energy

Products

Agricultu

ral

Products

TOTAL

200

9-10

310951039

.30

129176087

.33

0.00 13184.75 148880330

.93

6644950.

56

595665592.

87

201

0-11

442622395

.10

238881499

.97

0.00 0.00 178676823

.30

9506241.

20

869686959.

57

201

1-12

950965214

.75

262349671

.40

25559.9

5

0.00 265351646

.01

14591559

.47

149328365

1.58

201

2-13

805813706

.44

309938252

.45

91474.1

0

3.79 344448326

.24

28746998

.88

148903876

1.90

201

3-14

543927079

.68

225951643

.31

166433.

97

0.00 284276827

.17

18992733

.04

107331471

7.17

201

4-15

225278191

.27

122968221

.15

80.41 0.00 164495341

.73

13407150

.72

526148985.

28

201

5-16

203981345

.29

147789650

.63

0.00 0.00 191740448

.98

11652928

.96

555164373.

86







The table shows the performance of commodities groups’ wise value of trade in Multi

Commoditry Exchange of India Limited (MCX) during the year 2009-10 to 2015-16. In the year

2009-10, the total value of trade in the MCX market was Rs. 595665592.87 crore which was

shared by Precious Metals Rs. 310951039.30 crore, Non-Precious Metals Rs. 129176087.33

crore, Environmental Products Rs. 13184.75 crore, Energy Products Rs. 148880330.93 crore

respectively, and Agricultural Products Rs. 6644950.56, but Ferrous Metals was not traded in

2009-10. During the year 2010-11, the total value of trade in MCX market was 869686959.57

crore, this total consisted of Precious Metals Rs. 442622395.10 crore, Non-Precious Metals Rs.

238881499.97 crore, Energy Products Rs. 178676823.30 crore, and Agricultural Products Rs.

9506241.20 crore; while Ferrous Metals and Environmental Products were nt traded in 2010-11.

In 2011-12, the total value of trade in MCX market was Rs. 1493283651.58 crore, in this overall

share of Precious Metals Rs. 950965214.75 crore, Non-Precious Metals Rs. 262349671.40 crore,

Ferrous Metals Rs. 25559.95 crore, Energy Products Rs. 265351646.01 crore, and Agricultural

Products Rs. 14591559.47 crore; but Environmental Products was not traded in the year 2011-12.

As at the year 2012-13, the total value of tarde in MCX market was Rs. 1489038761.90 crore, in

this included Precious Metals Rs. 805813706.44 crore, Non-Precious Metals Rs. 309938252.45

crore, Ferrous Metals Rs. 91474.10 crore, Environmental Products Rs. 3.79 crore, Energy

Products Rs. 344448326.24 crore, and Agricultural Products Rs. 28746998.88 crore. For the year

2013-14, the total value of trade in the MCX market was Rs. 1073314717.17 crore, this total

included Precious Metals Rs. 543927079.68 crore, Non-Precious Metals Rs. 225951643.31

crore, Ferrous Metals Rs. 166433.97 crore, Energy Products Rs. 284276827.17 crore, and

Agricultural Products Rs. 18992733.04 crore; but Environmental Products was not traded in this

year. In the year 2014-15, total value of trade in MCX market was Rs. 526148985.28 crore, in

this share of Precious Metals Rs. 225278191.27 crore, Non-Precious Metals Rs. 122968221.15

crore, Ferrous Metals Rs. 80.41 crore, Energy Products Rs. 164495341.73 crore, and

Agricultural Products Rs. 13407150.72 crore; but Environmental Products was not traded in

2014-15. In 2015-16, the total value of trade in the MCX market was Rs. 555164373.86 crore, in

this includes Precious Metals Rs. 203981345.29 crore, Non-Precious Metals Rs. 147789650.63

crore, Energy Products Rs. 191740448.98 crore, and Agricultural Products Rs. 11652928.96

crore; but Ferrous Metals and Environmental Products were not traded in the year 2015-16.

Table 4: Commodities Traded Value (In Crore) on Multi Commodity Exchange (MCX)

Traded

Commodit

ies

Years

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Gold 207797608.

29

248477853.

35

384270982.

58

374306995.

88

303558341.

23

124715869.

34

116926632.

35

Silver 103092321.

07

194143239.

53

566692906.

81

431506570.

91

240368738.

45

100562321.

93

87054712.9

4

Platinum 61109.94 1302.21 1325.36 139.66 0.00 0.00 0.00

Aluminium 2686354.73 9358679.50 10584332.9

9

19941160.2

3

17847127.3

6

15599668.4

2

15647376.6

5




Copper 74762138.8

5

107574568.

97

139193835.

39

158011796.

33

97072236.6

7

35517908.4

0

46190482.4

2

Lead 15571103.2

4

32879135.0

9

34569646.5

9

50201479.1

4

54080109.4

9

23045528.5

0

26150636.3

0

Nickel 18977263.4

3

45022922.5

9

39914558.8

7

44692941.7

8

24657619.8

1

24888864.4

7

24630766.3

4

Steel Long 35691.03 4602.47 0.00 0.00 0.00 0.00 0.00

Steelflat 7.42 0.00 0.00 0.00 0.00 0.00 0.00

Tin 19331.73 4472.43 196.91 335.54 0.00 0.00 0.00

Zinc 17124196.9

0

44037118.9

3

38087100.6

5

37090539.4

3

32294549.9

8

23916251.3

6

35170388.9

3

Ironore 0.00 0.00 25559.95 10.23 0.00 0.00 0.00

Steel 0.00 0.00 0.00 91463.86 166433.97 80.41 0.00

CER 13184.75 0.00 0.00 0.00 0.00 0.00 0.00

CFI 0.00 0.00 0.00 3.79 0.00 0.00 0.00

ATF 3.98 0.00 815.22 0.00 0.00 0.00 0.00

Brent

Crude Oil

0.00 8207.94 11980.12 778490.80 350787.40 2445.37 67.96

Crude Oil 121020964.

66

150743390.

24

242044737.

34

289229240.

48

220009452.

77

111401090.

11

163198972.

04

Electricity 26.43 0.00 0.00 0.00 0.00 0.00 0.00

Gasoline 205935.14 3511.97 107.59 123.67 0.00 0.00 0.00

Heating

Oil

154891.13 2376.85 139.28 0.00 0.00 0.00 0.00

Natural

Gas

27497924.3

5

27919327.6

9

23293743.7

7

54440421.0

1

63916587.0

0

53091806.2

5

28541408.9

8

Thermal

Coal

585.24 8.62 122.68 50.29 0.00 0.00 0.00

Almond 103971.53 10364.37 418.84 292.74 127.21 0.00 0.00

Arecanut 86.27 0.00 0.00 0.00 0.00 0.00 0.00

Barley 0.00 6283 4.71 1190.45 0.00 0.00 0.00 0.00

Cardamom 182346.38 901410.50 936781.27 2866931.30 1419637.72 685245.38 407143.33

Castor

Seed

2508.57 0.00 0.00 0.00 0.00 0.00 0.00

Chana 833225.76 149706.42 2091.13 41.24 0.00 0.00 0.00

Coriander 1615.11 5.77 2242.22 0.00 0.00 0.00 0.00

Cotton 49408.45 0.00 0.00 0.00 0.00 0.00 0.00

Cotton

(29mm)

0.00 0.00 202609.28 1739017.13 4736423.90 5253551.49 2747702.24

Cottonseed

Oil Cake

3837.79 773.20 6.30 119776.01 362157.13 3118.35 518.86

Crude

Palm Oil

1265898.71 1773214.28 4730723.23 10002355.5

7

5195761.47 4351148.42 4048051.43

Flakement

h

0.00 8026.17 834.68 0.00 0.00 0.00 0.00

Guargum 726.54 0.00 0.00 0.00 66313.86 7.10 0.00

Guarseed 576394.05 57651.60 2822.92 37.36 360577.52 56.97 0.00




Jute 282942.36 0.00 0.00 0.00 0.00 0.00 0.00

Kapas 80292.97 116888.73 350701.82 564401.58 292151.52 80537.53 1154.90

Maize 99.83 19240.19 1501.32 35.22 0.00 0.00 0.00

Menthaoil 1011410.54 5013965.14 6659252.09 12470449.0

9

6153777.16 2680333.40 4448358.22

Mustrdseed 10.43 0.00 0.00 0.00 0.00 0.00 0.00

Pepper 48594.66 0.00 0.00 0.00 0.00 0.00 0.00

Potato 286644.41 764947.13 957847.55 933152.86 405180.72 353152.08 0.00

Refined

Soy Oil

1726681.48 606853.97 68328.31 335.37 618.70 0.00 0.00

Rubber 148.51 9.56 0.00 0.00 0.00 0.00 0.00

Soyabean 77771.94 1654.49 16.67 0.00 0.00 0.00 0.00

Sugar 6268.23 12649.00 673951.39 50170.25 6.14 0.00 0.00

Turmeric 0.00 25.78 0.00 0.00 0.00 0.00 0.00

Wheat 104039.44 6020.21 240.04 3.17 0.00 0.00 0.00

Yellowpea

s

26.60 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL 595665592.

87

869686959.

60

1493283651

.61

1489038761

.92

1073314717

.18

526148985.

28

555164373.

89


MCX is the major and largest contributor in the commodity markets of India. The table

shows the annual growth of Multi Commodity Exchange of India Limited (MCX) market during

the year 2009-10 to 2015-16. In 2009-10, Gold, Crude Oil, Solver, and Copper increased over

the year; while Steel, Brent Crude Oil, Barley, Flakementh, and Turmeric were not traded in this

year. Steelflat, Castor seed, CER, Electricity, Arecanut, Cotton, Jute, Mustrdseed, Pepper, and

Yellowpeas were traded only in 2009-10. Steel Long and Rubber were traded both in the year

2009-10 and 2010-11; but Cotton (29mm) was not traded both in the year 2009-10 and 2010-11.

During the year 2010-11, Gold, Silver, Crude Oil, and Copper and other commodities increased

in the year; whereas Turmeric was traded only this year. Barley and Flakementh were not traded

both in the year 2010-11 and 2011-12; whereas ATF traded in the 2009-10 and 2011-12. In the

year 2011-12, Silver, Gold, Crude Oil, and Copper commodities sharply growth in the MCX

market; while Ironore was traded only both in the year 2011-12 and 2012-13. As at the year

2012-13, Silver, Gold, Crude Oil, and Copper commodities increased in the MCX market; while

CFI was traded only in the year 2012-13. In the year 2013-14, Gold, Silver, Crude Oil, and

Copper increased in the MCX market. In 2014-15, Gold, Crude Oil, Silver, and Copper and other

commodities increased in the MCX market. During the year 2015-16, Crude Oil, Gold, Silver,

and Copper commodities sharply increased in the MCX market; whereas Refined Soy Oil and

Sugar were not traded both in the year 2014-15 and 2015-16.

Conclusion

The India Commodity market has undergone lots of changes due to the changing global

economic scenario; thus throwing up many opportunities in the process. Multi Commodity





Exchange of India Limited (MCX) is an India-based holding company. The MCX Company

operates an electronic commodity futures exchange. The MCX is a demutualized exchange and

is engaged in online trading, clearing and settlement operations of commodity futures

transactions. MCX offers futures trading across segments, including bullion, ferrous and non-

ferrous metals, energy and agricultural commodities (mentha oil, cardamom, crude palm oil,

cotton and others). The MCX flagship index, the MCX COMDEX, is a real-time composite

commodity futures price index, which gives information on market movements in key

commodities. Other commodity indices developed by the Company include MCXAgri,

MCXEnergy and MCXMetal. From September 28, 2015, MCX is being regulated by the

Securities and Exchange Board of India (SEBI). MCX is the largest commodity exchange in

India offering more than 55 commodities contracts across various segments. The Multi

Commodity Exchange of India Limited (MCX) is the world’s largest exchange in Silver, the

second largest in Gold, Copper and Natural Gas and the third largest in Crude Oil futures. MCX

is the most efficient and cost-effective platform for price discovery and price-risk management in

India’s commodity market. MCX is India’s leading commodity derivatives exchange with a

market share of 84.3% in terms of the value of commodity futures contracts traded in 2015-16,

and the total value of trade was INR 555164431.86 Crore as at the end of the year 2015-16.

References

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