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V Commodity markets are markets where raw or primary
products are exchanged.

V These raw commodities are traded on regulated

commodities exchanges

V These are bought and sold in standardized contracts.

 Ministry of consumer
Affairs
tate Government

pot markets Forward Markets

Commission

Futures Market

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 egulatory tructure in India

  

   






 


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V áiversify from the traditional options like shares,
bonds and portfolios.
V Almost all commodities entitled for futures trading.
V The commodities and future market in the country is
regulated by Forward Markets commission (FMC).
V Three multi commodity exchanges have been set up in
the country
£ Multi Commodity Exchange (MCX)
£ National Commodity and áerivatives Exchange
(NCáEX)
£ National Multi-Commodity Exchange (NMCE)
    
   


FMC

Commodity Exchanges

National egional
exchanges exchanges

NCáEX NMCE MCX NBOT
Other egional Exchanges

ð
V ÿ Major Categories:
V Agricultural products (aka soft commodities) Ȃ fibers,
grains, food, livestock

V Energy Ȃ crude oil, heating oil, natural gas

V Metals Ȃ copper, aluminum, gold, silver, platinum

V pot trading is any transaction where delivery either
takes place immediately, or with a minimum lag
between the trade and delivery due to technical
constraints.
V It involves visual inspection of the commodity or a
sample of the commodity.
V Commodity market require the existence of agreed
standards so that trades can be made without visual
inspection.
V A forward contract is an agreement between two
parties to exchange at some fixed future date a given
quantity of a commodity for a price defined today.
V A futures contract has the same general features as a
forward contract but is transacted through a futures
exchange.
V Governments must provide Ȃ
£ a common regulatory or insurance standard
£ some release of liability
£ at least a backing of the insurers, before a commodity
market can begin trading.


    


V áelivery day, method of settlement and delivery point
must all be specified.
V One of most common   investments
V egarded by some as Ǯultimate store of valueǯ
V Also considered one of most effective hedges against
inflation, social, political, and economic crises in the


V @rovides historically lower returns
V een an upturn in the volume of trading in recent
years.
V The value of global physical exports of commodities
increased by 1ð
V The notional value outstanding of commodity OTC
derivatives increased more than _


V The commodity derivative trading on exchanges more
than


V Global physical and derivative trading of commodities
on exchanges increased more than a third in

ð to
reach 1,68° million contracts.
V Agricultural contracts trading grew by ÿ ,energy
 and industrial metals by ÿ
.
V Indiaǯs share in the global commodity market is not as
big as estimated.
V India accounts for ÿ of the global oil demands and
 of global copper demands.