Commodity exchange

1. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
COMMODITY EXCHANGE
Lakshminarayanan Alaguraja
Advocate
Altacit Global

2. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
What are Commodities?
In economics, a commodity is the
generic term for any marketable item
produced to satisfy wants or needs.
Economic commodities comprise goods
and services.

3. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
Commodity Exchange
a commodity exchange is defined as an association,
or alternatively a company, as well as any corporate
body that organizes trading in commodities. Earlier
the commodity exchange was more like an open
market place where traders would call their bids and
purchase commodities.
A commodities exchange is an exchange where
various commodities and derivatives products are
traded. Most commodity markets across the world
trade in agricultural products and other raw
materials.

4. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
…cont
Commodities exchanges usually trade futures
contracts on commodities, such as trading contracts
to receive something, say corn, in a certain month. A
farmer raising corn can sell a future contract on his
corn, which will not be harvested for several
months, and guarantee the price he will be paid
when he delivers; a breakfast cereal producer buys
the contract now and guarantees the price will not
go up when it is delivered. This protects the farmer
from price drops and the buyer from price rises.

5. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
Commodity Market
Commodity markets are markets where
raw or primary products are
exchanged. These raw commodities are
traded on regulated commodities
exchanges, in which they are bought
and sold in standardized contracts.

6. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
Early History
Commodity exchanges began in the
middle of the 19
th
century, when
businessmen began organizing market
forums to make buying and selling of
commodities easier. These market
places provided a place for buyers and
sellers to set the quality, standards, and
establish rules of business.

7. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
Commodity Exchange and
Stock Exchange
•The basic difference between the
commodity exchange and stock exchange
is that while in commodity exchange non-
financial commodities i.e. agro products
such as castor, groundnut, sesame etc. and
non agro products such as aluminum, zinc,
nickel etc. are traded. However in a stock
exchange all financial products are traded
such as stocks, indexes, interest rate,
government securities etc. are traded.

8. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
Commodity Futures
•Futures are standardized agreements
between a buyer and a seller to exchange
a pre-agreed quantity of an asset of pre-
specified quality:
–at a specific price, and at a pre-specified
future date
• If the underlying asset is a commodity, the
futures are called commodity futures.

9. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
Background
•The future commodity trading has long history in India and
started as early as 1857 .
•Due to ongoing global and domestic reforms in agriculture
and allied sectors, the government is reducing its direct
market intervention and encouraging private participation
based on market forces
•This has led to increased exposure of agricultural produce
to price and market risks which consequently emphasizes
the importance of future markets for price discovery and
price risk management.
•As a result, the Government of India issued notifications on
April 1, 2003 and permitted futures trading in a wide range
of agricultural commodities except options trading.

10. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
Regulation
•Forward Controls (Regulation) Act, 1952
–Act applicable to all trades where delivery was
after more than 11 days.
•Forward Markets commission regulatory
body .

11. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
Commodity exchange India
At present, there are 3 national level commodities
exchanges namely National Multi-Commodity
Exchange of India (NMCE), National Commodity and
Derivatives Exchange Ltd (NCDEX) and Multi
Commodity Exchange of India Ltd (MCX) and 21
regional exchanges allowed for derivatives trading of
agricultural commodities.
The 3 major national commodity exchanges are:
•National Commodity and Derivatives Exchange
Limited
•Multi Commodity Exchange of India Ltd
•National Multi Commodity Exchange of India Ltd

12. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
National Commodity and Derivatives
Exchange Limited - NCDEX:
This is an online multi-commodity exchange that is
promoted and professionally managed by ICICI Bank
Limited, Life Insurance Corporation of India, National
Bank for Agriculture and Rural Development, National
Stock Exchange of India Limited , Punjab National Bank,
CRISIL Limited, Indian Farmers Fertiliser Cooperative
Limited and Canara Bank.
NCDEX, located in Mumbai, is a public limited company,
which was incorporated on 23rd April 23 2003. this was
done under the Companies Act, 1956. on 9th May 2003,
it was given its Certificate for Commencement of
Business, and it started its business operations on 15th
December 2003.

13. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
Multi Commodity Exchange of
India Ltd - MCX
Multi Commodity Exchange of India Ltd. (MCX), is a state-of-
the-art electronic commodity futures exchange. The
demutualised Exchange has permanent recognition from the
Government of India to facilitate online trading, and clearing
and settlement operations for commodity futures across the
country. The Exchange operates within the regulatory
framework of the Forward Contracts Regulation Act, 1952
(FCRA, 1952) and regulations there under.
It was established in 2003 and is based in Mumbai. The
turnover of the exchange for the fiscal year 2009 was US$ 1.24
trillion, and in terms of contracts traded, it was in 2009 the
world's sixth largest commodity exchange.

14. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
National Multi Commodity
Exchange of India Ltd – NMCEIL
The National Multi-Commodity Exchange of India Limited, is regarded
as the first de-mutualised online multi-commodity exchange that has
been established in the country. It was incorporated on 20th
December 2001, but began business operations on 26th November
2002.
It promoting and managing institutions include:
•Central Warehousing Corporation – CWC
•National Agricultural Cooperative Marketing Federation of India
Limited – NAFED
•Gujarat Agro Industries Corporation Limited - GAIC
•National Institute of Agricultural Marketing - NIAM
•Gujarat State Agricultural Marketing Board - GSAMB
•Neptune Overseas Limited

15. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
Role of Commodity Exchange
•Platform for hedging and speculation
•Standardization of futures
•Facilitation of real price discovery
•Ensuring fair play
•Track of business transacted
•Fixing rules for trading
•Dissemination of information

16. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
Structure of Indian Commodity
Futures Exchanges

17. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com
FOCUS
•Why do we need this market?
–Price Stability
–Liquidity and Volume
–Integrated Agricultural Market
–Risk trading by the small formers

18. CHENNAI
3rd Floor, ‘Creative Enclave’,
148-150, Luz Church Road,
Mylapore,
Chennai - 600 004.
Tel: +91 - 44 - 2498 4821
BANGALORE
Suite 920, Level 9,
Raheja Towers,
26-27, M G Road,
Bangalore - 560 001.
Tel: +91 - 80 - 6546 2400
COIMBATORE
BB1, Park Avenue,
# 48, Race Course Road,
Coimbatore - 641018.
Tel: +91 - 422 – 6552921
EMAIL
[email protected]
WEBSITE
www.altacit.com