Commodity Awareness Programme Organised by MCX and FMC to Promote Hedging
Bhadrak, Odisha, India
With an objective to create awareness, and educate the market participants about the benefits of hedging, Multi Commodity Exchange of India Ltd (MCX), Forward Markets Commission (FMC), and Bhadrak Jewellers Association, jointly organised an awareness programme at Bhadrak (Odisha) on January 22.
The programme served to explain in detail all the technicalities associated with the working of a commodity exchange. The experts elaborated on the topics such as the benefits of hedging, importance and need for risk management measures, role of commodity futures exchanges, and the regulatory perspective. They further explained to the market participants about the benefits and advantages—higher liquidity, transparent pricing, central clearing, robust risk management and surveillance system—of trading on a regulated commodity exchange platforms such as MCX. It was a platform to create a better understanding of the commodity futures market among the participants, thereby enabling them to hedge risks, in the face of volatile market conditions. Other topics included, economic benefits of commodity futures, historical perspective and growth of commodity markets in India, and diverse and innovative product basket offered by MCX among others.
Mr. Navanit Ray Parekh, President, Bhadrak Jewellers Association said, “Armed with the necessary knowledge shared by the experts today, we will now be able to better understand the functioning of the commodity markets, and hedge our bullion price risks by trading on the regulated commodity exchanges such as MCX.”
“It was interesting to know about the different variants of both Gold and Silver contracts with different lot sizes —gold mini, gold petal, gold guinea, silver mini and silver micro— offered by MCX, to suit the requirements of the commodity value chain participants”, he further added.
This informative seminar gave the participants a detailed insight into the world of futures trading and the plethora of benefits thereof to the stakeholders of the underlying commodities. Moreover, the speakers emphasised on the manner in which the participants can manage the risks arising from fluctuating prices by hedging such risks using commodity futures contracts.
The programme was attended by more than 100 market participants and the queries put forward by them were answered by the experts. They thanked FMC and MCX for organising this interactive session which helped them gain an insight into the commodity futures markets.
Having commenced operations on November 10, 2003, Multi Commodity Exchange of India Limited (MCX) is India’s first listed, national-level, electronic, commodity futures exchange with permanent recognition from the Government of India. MCX offers the benefits of fair price discovery and price risk management to the Indian commodity market ecosystem. Various commodities across segments are traded on MCX. These include bullion, energy, metals and agri commodities. The exchange has forged strategic alliances with various Indian and International commodity exchanges and business associations.