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Commodity Exchanges in India Research Team | Posted On Saturday, April 18,2009, 05:33 PM

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Commodity Exchanges in India



Commodity trading is progressively becoming a prominent business in India. To facilitate this trading there are various exchanges setup in India. These exchanges are the center of the trading of various commodities. The two important commodity exchanges in India are as follows:

  • Multi Commodity Exchange of India (MCX)
  • National Commodities and Derivatives Exchange Limited (NCDEX)
The main Indian commodity exchange is the Multi Commodity Exchange of India (MCX). The other very famous commodity exchange is National Commodities and Derivatives Exchange Limited (NCDEX). NCDEX is located in Mumbai and offers facilities in more than 550 centers in India.
MCX features amongst the world's top three bullion exchanges and top four energy exchanges. MCX is the only Exchange in India to have such investment and technical support from the commodity pertinent institutions. The day-to-day operations of the Exchange are administered by the experienced and qualified professionals with perfect integrity and expertise.
See Also: Foreign Exchange Market In India
National Commodity & Derivatives Exchange Limited (NCDEX)
National Commodity & Derivatives Exchange Limited (NCDEX) is a proficiently managed on-line multi commodity exchange promoted by ICICI Bank Limited (ICICI Bank), Life Insurance Corporation of India (LIC), National Bank for Agriculture and Rural Development (NABARD) and National Stock Exchange of India Limited (NSE), Canara Bank, PNB, CRISIL Limited (formerly the Credit Rating Information Services of India Limited), Goldman Sachs, Indian Farmers Fertilizer Cooperative Limited (IFFCO) and Punjab National Bank by subscribing to the equity shares have joined the initial promoters as shareholders of the Exchange. NCDEX is the only commodity exchange in the country sponsored by national level institutions. This unique parentage enables it to offer a bouquet of advantages, which are currently in short supply in the commodity markets. The institutional promoters and shareholders of NCDEX are famous players in their respective fields and bring with them institutional building experience, trust, nationwide reach, technology and risk management skills.
NCDEX is a public limited company incorporated on April 23, 2003 under the Companies Act, 1956. It obtained its Certificate for Commencement of Business on May 9, 2003. It started its operations on December 15, 2003. It is a nation-level, technology driven de-metalized on-line commodity exchange with an independent Board of Directors and professional management - both not having any vested interest in commodity markets. It is committed to provide a world-class commodity exchange platform for market participants to trade in a broad spectrum of commodity derivatives driven by best global practices, professionalism and transparency.
NCDEX is synchronized by Forward Markets Commission. NCDEX is subjected to various laws of the land like the Forward Contracts (Regulation) Act, Companies Act, Stamp Act, Contract Act and various other legislations. NCDEX currently facilitates trading of 57 commodities
Multi Commodity Exchange of India Ltd. (MCX)
MCX is a self-governing and de-mutualised multi commodity exchange. It was inaugurated on November 10, 2003 by Mr. Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd.; and has permanent recognition from the Government of India for facilitating online trading, clearing and settlement operations for commodities futures market across the country. Today, MCX features amongst the world's top 3 bullion exchanges and top 4 energy exchanges.
MCX offers a broad spectrum of opportunities to a large cross section of participants including producers/ processors, traders, corporate, regional trading center, importers, exporters, co-operatives and industry associations amongst others. Headquartered in the financial capital of India, Mumbai, MCX is led by an expert management team with in-depth domain knowledge of the commodities futures market. Presently, the average daily turnover of MCX is around USD1.55 bn (Rs.7, 000 crore - April 2006), with a record peak turnover of USD3.98 bn (Rs.17, 987 crore) on April 20, 2006. In the 1st calendar quarter of 2006, MCX holds more than 55% market share of the total trading volume of all the domestic commodity exchanges. The exchange has also affected large deliveries in domestic commodities, signifying the efficiency of price discovery.
Being a nation-wide commodity exchange having state-of-the-art infrastructure, presenting multiple commodities for trading with wide reach and penetration, MCX is well placed to tap the immense potential poised by the commodities market.

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