Establishment Of Commodity Market in India

A commodity is a kind of assets that is cyclical and exchangeable by nature. It can be divided as every kind of fluidizable good that can be bought and sold, except for doable claims and money.

Commodities' trading is such a phenomenal option for those traders who want to diversify from the traditional portfolios of shares, bonds, debentures, etc. and may be freely done through an online commodity exchanging account.

The Indian commodity market includes both retail and wholesale platform. It is controlled by forwarding Markets Commission (FMC), which allow you to multi-commodity exchanges within and outside the nation. Online Commodity trading is now supposed to be as a good substitutive entity to put money in the country.

The Indian government has made almost all commodities eligible for futures trading. Several national and regional exchanges have been determined up to facilitate this for retail speculators. The national multi-commodity exchanges operating in India are as follows:

• Multi Commodity Exchange of India Ltd. (MCX)

• National Commodity and Derivatives Exchange Ltd. (NCDEX)

• National Multi-Commodity Exchange of India Ltd.(NMCEIL)

• Indian Commodity Exchange Ltd. (ICSE)

• ACE Derivatives and Commodity Exchange

MCX has become the world's largest exchange when we talk in terms of the number of contracts traded in gold and silver futures, second leading in natural gas and third in crude oil.

By nature, all commodity exchanges are unpredictable. Before the prices are arrived at, they become public as well as classes: manufacturers, consumers, and even the retail traders. Thus, they bring about clarity in pricing and recovery in risk management.

There are more than 100commodities traded in the commodity futures market, out of which 50 are actively traded. This attractive bullion such as, metals, agricultural commodities, energy products, etc.

Despite being a substantial and promising economy, India's presence in the global commodity market is not as huge as expected. Except for gold, its share in other sectors of the commodity market is not very promising. India accounts for a minuscule percentage of global oil and copper demands. also  In agriculture, the country's contribution to international trade volumes is far at the lower side when compared to its huge production level.

However, while 2002 the commodities future market in India has seen a rapid growth when it comes to blooming number of exchanges, expanding the number of commodities applicable for derivatives trading as well as the commodities'value in futures trading. The latter overcome the $1 trillion spot in 2006.

In spite of the fact that the shares in commodities trading are level high all records, following the sharp outpouring in earnings and trade volumes in recent years, it is still considered to be at an immature stage, thus requiring the need for more flexible policies and an aggressive expansion plan with innovative ideas.