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Commodity Trading in India: The 6 National Exchanges

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A commodity exchange  is an organized virtual or physical marketplace where tradable securities, derivatives and commodities are put on sale and purchase.

Image via commodityonline.com
Image via commodityonline.com

Yeah, it’s same like the marketplace. Commodity derivatives exchanges are places where trading of commodity futures and options contracts are done. However, do you know that there are six commodity trading platforms in India? Let’s have a brief look-

1-The Multi Commodity Exchange of India Ltd, Mumbai (MCK)

Image via livemint.com
Image via livemint.com

The MCX is based in Mumbai and was established in 2003. MCX specializes in trading in:

  • Agricultural commodities (such as cotton, palm oil, crude, cardamom and menthe oil among others)
  • Energy
  • Non-ferrous metals
  • Bullion

2-The National Commodity and Derivatives Exchange Limited, Mumbai (NCDEX)Stock Exchange2

The NCDEX is an online-based commodity exchange platform incorporated in 2003. It is currently the only program promoted by national institutions and regulated by the Forward Markets Commission (FMC). NCDEX key features are:

  • 31 agricultural and non-agricultural commodities
  • Offers the value-weighted DHAANYA index commuted in real time
  • Uses a web-based, free charting tool to provide users with technical analysis
  • Has a proprietary electronic warehouse system

3-The National Multi-Commodity Exchange of India Ltd, Ahmedabad (NMCE)Stock Exchange3

The NMCE describes itself as the first demutualized multi-commodity exchange to be set up by public institutions. The program offers a basic application that automatically processes trading requests. NMCE offers contracts for:

  • Oils and oil seeds (guar seed, mustard/rape seed, soybean oil, copra and castor seed)
  • Spices (pepper, cardamom)
  • Pulses
  • Others including rubber, sacking and coffee rep bulk

4-The Indian Commodity Exchange Limited (ICEX)

Representational image via utmagazine.ru
Representational image via utmagazine.ru

The ICEX is another online-based derivatives exchange platform that has established as saying and warehousing facilities for fast deliveries. The exchange encourages the participation of actual users, traders and farmers to benefit from the benefits offered by hedging, supply chain management and risk management. ICEX deals in:

  • Precious metals (gold and silver)
  • Metals (copper and lead)
  • Energy (crude oil and natural gas)
  • Oil and oil seed complex (mustard, castor, and soya bean and oil)
  • Minerals (iron ore)

5-ACE Derivatives and Commodity Exchange Ltd. (ACE)Stock Exchange5

ACE is also online-based and was formerly known as Ahmedabad Commodity Exchange. The exchange has been around for 50 years. ACE deals with:

  • New age products
  • Precious metals (gold and silver)
  • Energy (crude oil)
  • Base metals (copper)
  • Fiber (cotton)
  • Pulses (chana)
  • Oils and oil seeds (castor seed, crude palm oil, mustard seed, refined soy oil, soy bean and soy bean meal)

6-The Universal Commodity Exchange, Mumbai (UCK)Stock Exchange6

UCK’s products include:

  • Bullion (gold and silver)
  • Metals (copper, lead, nickel and zinc)
  • Energy (natural gas and crude oil)
  • Agriculture (soy bean, refined soya oil, chana, mustard seed, rubber RSS4 and turmeric)

All national and regional exchanges are regulated by the Forward Markets Commission (FMC) which, since September 2015, merged with the Securities and Exchange Board of India, SEB. Key functions of commodity derivatives exchanges is to provide and enforce rules and regulation for fair and uniform trading practice and promote transparent trading.

For more information and news related to commodity you can visit Money Bhaskar’scommodity market section.