commodity xchange

8/12/2019 Commodity Xchange

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Commodity Exchange in IndiaSURFING THROUGH - THE MARKET STUDY


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What is a Commodity Exchange?

It is an exchange where variouscommodities(minerals and edibleproducts) and derivative agreements(share or currency) are traded .

It usually trades future contracts oncommodities, where two parties agreeto buy or sell a specified commodityat a specified future date at a priceagreed today.


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Commodity exchange in India

In India there are 25 recognized futureexchanges, of which there are three nationallevel multi-commodity exchanges.

Government of India has allowed forwardtransactions in commodities through OnlineCommodity Exchanges, a modification oftraditional business known as Adhat andVayda Vyapar to facilitate better risk coverageand delivery of commodities.


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National Exchanges in India

National Commodity and Derivatives ExchangeLimited(NCDEX)Multi Commodity Exchange of India Limited(MCX)National Multi-Commodity Exchange of IndiaLimited(NMCEIL)

All the Commodity exchanges are set up under the

control of FMC (Forward Market Commission)aregulatory authority overseen by Ministry ofConsumer Affairs, Food and PublicDistribution, Govt. of India.


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Other regional Commodityexchanges

Ace Derivatives andCommodity ExchangeLimited.Bombay CommodityExchange Ltd.East India Jute &Hessian Exchange Ltd.National Board ofTrade.Haryana CommoditiesLtd.

Vijay Beopar ChamberLtd.Spices and OilseedsExchange Ltd.First CommodityExchange of India Ltd.Cotton Association ofIndia.Chamber Of Commerce.India Pepper & SpiceTrade Association Ltd.


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Trading permission granted in thecommodities in 2010 by FMC

Fibres- Kapas, Kalyan, Kapas,Sacking, Raw Jute.Spices- Coriander / Dhania,Cardamom, Turmeric, Pepper,

Jeera / Cumin seed.Edible Oilseeds & Oil- CrudePalm Oil, RBD Palmoline, Rape /Mustard Seed, Copra / CoconutOil, Soya Bean. Refined Soya Oil,Yellow Soy Bean Meal, CastorSeed, Kapas Khali / Cottonseed,Oilcake Expeller Mustard Oil(Kachhi Ghani).Pulses- Chana.

Energy Products-Gasoline, NaturalGas, Imported Thermal Coal,Electricity (Monthly & Weekly),Heating Oil, Aviation Turbine Fuel(ATF), Crude Oil, Light SweetCrude Oil, Brent Crude Oil.Vegetables & Others-Potato,Barley, Maize-Feed/Ind. Grade,Yellow / Red Maize, Wheat,Almond, Isabgul seed, Guar seed,Coffee, Carbon Credit (CER)Rubber, Mentha Oil, Gur, MentholFlakes, Menthol Crystal, GuarGum.


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Trading permission granted in thecommodities in 2010 by FMC

Metals :CopperAluminiumLeadMild Steel Ingot /Billets

Steel LongNickelPlatinum

Zinc

TinGold ( 1 Kg.)Gold Mini (100Gms)Gold HNI

Gold GuineaGold InternationalSilver (30 Kg.)

Silver HNI


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Participants in Commodity Future

Farmers/Producers Merchandisers/Traders ImportersExportersConsumers/IndustryCommodity FinancersAgriculture credit providing agenciesCorporate having price risk exposure inCommodities.


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COMMODITIES


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Crude Oil

Crude oil is a mixture of hydrocarbons that exists in aliquid phase in natural underground reservoirs. Oiland gas account for about 60 per cent of the totalworld's primary energy consumption.Almost all industries including agriculture aredependent on oil in one way or other. Oil &lubricants, perfumes, etc. are largely and directlyaffected by the oil prices. India ranks among the top

10 largest oil-consuming countries. The country'stotal oil consumption is about 2.2 million barrels perday. India imports about 70 per cent of its total oilconsumption and it makes no exports.


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Market shares

SPOT MARKET RATE: CRUDE OIL 1BBL Mumbai: 3720.00(as recorded on 19th )FUTURE MARKET:Symbol CRUDE OIL CRUDE OIL CRUDE OIL

Expiry Month 21MAR2011 18APR201119MAY2011

Unit 1BBL 1BBL 1BBLOpen(Rs) 3891.00 3925.00 3898.00High(Rs) 3922.00 3964.00 3995.00Low(Rs) 3890.00 3926.00 3898.00Change(%) -0.08% 0.35% 3.34%

(Figures recorded as on 19th Nov 2010)


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Value of crude oil in the commoditiesmarket 2009-2010

YEAR COMMODITY CONTRACT VALUE(IN LAKHS)

2009 CRUDE OIL 121020964.7

2010 CRUDE OIL 134063326.3


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Gasoline

Gasoline is a petroleum-derived liquid mixture which is primarily used as afuel in internal combustion engines It is also used as a solvent, mainly knownfor its ability to dilute paintsGasoline is largely a mixture of hydrocarbons (mixture of n- paraffins,naphthenes, olefins and aromatics), some may contain significant quantities ofethanol and some may contain small quantities of additives such as tertiarybutyl methyl ether as anti-knock agents to increase the octane rating.TYPICAL COMPOSITION OF GASOLINE

GENERAL NAME EXAMPLES PERCENTAGE

Aliphatic -straight chain heptane 30-50

Aliphatic branched isooctane

Aliphatic cyclic cyclopentane 20-30

Aromatic ethyl benzene 20-30


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Gasolne in the commodities market 2009-2010


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Value of gasolne in the commoditiesmarket 2009-2010


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Natural gas

Natural Gas, touted as the clean fuel of 21st century, is a gas consisting primarily ofmethane, typically with 0-20% higher hydrocarbons (primarily ethane). It is fastemerging as a major energy source all over the world and is estimated to contributearound 26% of global energy consumption by 2030. Demand for natural gas growingat rapid clip during the past decade is expected to gather further momentum due to

high price of oil as well as environmental concerns.Spot market rate: natural gas 1mmbtu HAZIRA-173.60 (as on 12th nov 2010)1 mmBTU (million British Thermal Units) =25.2 SCM (Standard Cubic Metre)Futures market:Symbol NATURAL GAS NATURAL GAS NATURAL GASExpiryMonth 25JAN2011 27DEC2010 23NOV2010Unit 1mmBTU 1mmBTU 1mmBTUOpen(Rs) 188.80 183.70 173.40High(Rs) 192.00 188.50 178.50Low(Rs) 188.00 183.70 173.40Change(%) 2.36 2.52 2.79(Figures recorded as on 16th Nov 2010)


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Value of natural gas in thecommodities market 2009-2010

22000000

23000000

24000000

25000000

26000000

27000000

28000000

NATURALGAS NATURALGAS

2009 2010

Value (Rs. In Lacs)

Value (Rs. In Lacs)

Year CommodityContractValue (Rs. In

Lacs)

2009 NATURALGAS 27497924.35

2010 NATURALGAS 23932799.95


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SILVER

Silver imports into India for domestic consumption in2002 was 3,400 tons down 25 % from record 4,540 tonsin 2001.Open General License (OGL) imports are the onlysignificant source of supply to the Indian market.Non-duty paid silver for the export sector rose sharply in

2002, up by close to 200% year-on-year to 150 tons.Around 50% of India's silver requirements last year weremet through imports of Chinese silver and other importantsources of supply being UK, CIS, Australia and Dubai.Indian industrial demand in 2002 is estimated at 1375tons down by 13 % from 1,579 tons in 2001. India is stillone of the largest users of silver in the world, rankingalongside Industrial giants like Japan and the United States. Bycontrast with United States and Japan, Indian industrialofftake for fabrication in hardcore industrial applicationslike electronics and brazing alloys accounts for only 15 %.


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SILVER

India Industrial Fabrication 2002Percentage

Pharmacy & Chemicals 22.4Foil 9Plating 13.7Solders & Brazing 5.4

Electrical 13.5Photography 0.85 Jari 17.1


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Share prices through the years


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Gold

India is the world's largest consumer of gold. Indians normally buyabout 25 per cent of the world's gold, purchasing around 700 - 750tonnes of gold every year.However, the sharp price increase in 2008 and 2009 has impacteddemand with total demand in 2008 dipping to 660 tonnes. It is furtherexpected to shrink in 2009 with demand in first three quarters of 2009totaling only around 265 tonnes against 553.5 tonnes in the sameperiod of the previous year.As India's domestic primary production of gold is very less, at around 2-3 tonnes a year, the country imports most of its domestic requirement.Thus, India is also the largest importer of the yellow metal and hasaveraged imports of around 600 tonnes a year. However, 2008 importsdipped to around 400 tonnes of gold and it is further expected to dip toaround 200-220 tonnes in 2009 owing to high prices.Gold hoarding tendency is well engrained in the Indian society andunofficial stocks held by Indians is estimated to be well above 15,000tonnes, which is around 9% of the total global gold stocks.Facilities for refining, assaying, making them into standard bars, coins inIndia, as compared to the rest of the world, are insignificant, bothqualitatively and quantitatively.


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Market moving factors

India is the world's largest consumer of gold. Indians normally buy about25 per cent of the world's gold, purchasing around 700 - 750 tonnes of gold every year.However, the sharp price increase in 2008 and 2009 has impacteddemand with total demand in 2008 dipping to 660 tonnes. It is furtherexpected to shrink in 2009 with demand in first three quarters of 2009totaling only around 265 tonnes against 553.5 tonnes in the same periodof the previous year.As India's domestic primary production of gold is very less, at around 2-3tonnes a year, the country imports most of its domestic requirement.Thus, India is also the largest importer of the yellow metal and hasaveraged imports of around 600 tonnes a year. However, 2008 importsdipped to around 400 tonnes of gold and it is further expected to dip toaround 200-220 tonnes in 2009 owing to high prices.Gold hoarding tendency is well engrained in the Indian society andunofficial stocks held by Indians is estimated to be well above 15,000tonnes, which is around 9% of the total global gold stocks.Facilities for refining, assaying, making them into standard bars, coins inIndia, as compared to the rest of the world, are insignificant, bothqualitatively and quantitatively.


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Gold Guinea


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CARDAMOM

Cardamom is the 'Queen of Spices' as it is one of the most exotic and highly prizedspices. Cardamom plants normally start bearing two years after planting. There arethree distinctive types of cardamom grown in India viz., Malabar, Mysore and Ceylontype. The two major commercial varieties of small cardamom in the world are theMalabar and the Guatemalan. Indian cardamom is slightly smaller, but morearomatic.SPOT MARKET RATE: CARDAMOM 1KG VANDANMEDU-1025.70(as on 19th Nov 2010)FUTURES MARKET:Symbol CARDAMOM CARDAMOM CARDAMOMExpiry Month 15JAN2011 15FEB2011 15MAR2011Unit 1KGS 1KGS 1KGSOpen(Rs) 990.00 980.00 990.00High(Rs) 1000.00 1000.00 997.50Low(Rs) 965.10 968.00 973.00Change(%) -2.03% -1.16% -1.43%

(Figures recorded as on 19th Nov 2010)


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VALUE OF CARDAMOM IN THECOMMODITIES MARKET 2009-2010

Year Commodity Contract Value (in lakhs)

2009 CARDAMOM 182346.38

2010 CARDAMOM 23932799.95


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Almond

Almonds are commonly sold shelled. Shelling almonds refers toremoving the shell to reveal the seed. Sweet almonds and Bitteralmonds are two forms of almonds. Chocolate confectionary,bakery and snacking are the three major global categories foralmond usage.The annual global Sweet almond production on shelled-basis hasbeen in the range of 7 - 8.5 lakh tonnes in the recent years.The other producing countries are Australia, Turkey, Chile,European Union, China and India with a production of 26,000tonnes, 16,000, 9500, 79,800, 1,500 and 1,200 tonnes on ashelled basis in 2008-09 .Most of the manual shelling of almonds in India is undertaken atBombay and New Delhi, from where the shelled almonds aretransported to other consumption centres.


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Market share prices

SPOT MARKET RATE: ALMOND1KG DELHI-351.00(as on 19th Nov 2010)

FUTURES MARKET:

Symbol ALMOND ALMONDExpiry Month 31DEC2010 31NOV2010Unit 1KGS 1KGSOpen(Rs) 295.75 321.25High(Rs) 296.00 321.25Low(Rs) 295.75 321.25Change(%) -2.87% -2.58%(Figures recorded as on 19th Nov 2010)


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Value of Almond in Commodities Market(2009-2010)

Year Commodity Contract Value (in lakhs)

2009 ALMOND 103971.53

2010 ALMOND 10355.82


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NICKEL

Nickel is a silvery-white lustrous metal with a slight golden tinge.It is extremely resistant to corrosion, low conductivity of heat andelectricity, tough and hard, ferromagnetic etc. The metal is primarily anindustrial metal and is required as an important ingredient in over 3000products. Manufacture of stainless steel accounts for 65 percent of globalnickel output. Rising demand and limited supply is the major feature of global nickel industry at present.Spot Market price: NICKEL 1 KGS Mumbai - 981.40(as recorded on 19th November 2010)Futures Market prices:Symbol NICKEL NICKEL NICKELExpiryMonth 31JAN2011 31DEC2010 30NOV2010Unit 1KGS 1KGS 1KGSOpen(Rs) 1001.90 994.00 987.20High(Rs) 1018.00 1009.90 999.80Low(Rs) 999.80 987.80 977.50Change(%) -0.62 -0.44 -0.50


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Value of Nickel in Commodities Market(2009-2010)

05000000

1000000015000000200000002500000030000000350000004000000045000000

NICKEL NICKEL2009 2010

Value (Rs. In Lakhs)

Value (Rs. In Lakhs)

Year CommodityHead Value (Rs. In Lakhs)

2009 NICKEL 18977263.43

2010 NICKEL 41187067.08


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Platinum

Platinum is corrosion resistant and is more precious than gold. Platinum'swear- and tarnish-resistance characteristics are well suited for makingfine jewelry.

Global Supply Demand Scenario

The platinum mining industry is very capital intensive and it is reported

that approximately 10 tonnes of raw ore has to be mined to produce just one pure ounce of platinum.

Indian Platinum Market

India's consumption of platinum in 2008-09 is estimated to be around 932kgs, which is expected to rise to around 1200 kgs in 2009-10.

Measurement Weight Conversion TableTo Convert from TO Multiply by

Troy ounce gram 31.1035

Troy ounce Kilo tonnes 0.0311035

Million troy ounce Troy ounce 32.1507

tonnes Troy ounce 32150.7


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Value of platinum in the commoditiesmarket 2009- 2010


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Aluminium

Aluminium is the third most abundant element in the Earth's crust.Aluminum is resistant to weather. India is considered the fifth largestproducer of aluminium in the world. India has emerged as a netexporter of aluminium, on competitive terms.Government monopoly, in terms of aluminium production, removalof price and distribution control over aluminium, has been diluted infavour of private sector.About a decade back, the primary Indian aluminium producers wereBALCO, NALCO, INDAL, HINDALCO and MALCO. Of the five, two(BALCO and NALCO) were in the public sector while the other threewere in the private sectorIt is estimated at about 3037 million tonnesfor all categories of bauxite (proved, probable and possible).With the present level of consumption of aluminum, the identifiedreserves would have an estimated life of over 350 years. India'sreserves are estimated to be 7.5 per cent of the total deposits andinstalled capacity is about 3 per cent of the world.


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Share Market Prices

SPOT MARKET RATE: ALUMINIUM 1Kg Mumbai - 102.25(as on 19.11.2010)

Symbol: Aluminium Aluminium Aluminium

Future 31JAN2011 31DEC2010 30NOV2010dateOpen 103.35 104.45 103.30High 103.85 105.80 104.70Low 103.10 103.60 102.25Change% -0.24% -1.05% -0.91%


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Value of Aluminium in the CommoditiesMarket from 2009-2010


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Indias Place in thw World Market

COMMODITY INDIA WORLD SHARE RANK

RICE (PADDY) 240 2049 11.71 THIRDWHEAT 74 599 12.35 SECONDPULSES 13 55 23.64 FIRST

GROUNDNUT 6 35 17.14 SECONDRAPE SEED 6 40 15.00 THIRD

SUGARCANE 315 1278 24.65 SECONDTEA 0.75 2.99 25.08 FIRST

COFFEE(GREEN)

0.28 7.28 3.85 EIGHTH

JUTE &FIBRES

1.74 4.02 43.30 SECOND

LINT COTTON 2.06 18.84 10.09 THIRD


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A Project by

Aarthi Padmanabhan Archana SridharKaruna VishwanathShwetaSukanya .CNandhini. A

Sugunya

commodity xchange

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