With an aim to contribute to the inclusion process through educating the market participants about the commodity futures market, Multi Commodity Exchange of India Ltd (MCX) and Forward Markets Commission (FMC) in association with Indo-American Chamber of Commerce organized a commodity awareness programme on Monday, February 16, 2015 at Kolkata.
During the programme, the experts from MCX explained about the technicalities of working of the commodity markets with respect to the products, price discovery, transparency and risk management mechanism in trading and settlement of transactions. Additionally, they highlighted the role of FMC in regulating and monitoring the functions of commodity exchanges in building confidence of the market participants, and for the growth of Commodities Market in India. They further elaborated on the topics such as the benefits of hedging, role of commodity futures exchanges, and the regulatory perspective.
While explaining about price discovery and price risk management, the two main functions performed by the commodity exchanges, Mr. Vibhor Tandon, Assistant Vice President, MCX said, “MCX provides an effective and efficient hedging platform to the commodity value chain participants to mitigate risks associated with high volatility in commodity prices.”
“The Exchange offers futures contracts in bullion, base metals, energy, and agri segments with different lot sizes to accommodate the needs of varied market participants, and significantly caters to the needs of existing and potential stakeholders of the commodity ecosystem including traders, manufacturers, exporters, importers, etc. Moreover, its mini contracts with small lot sizes enable SMEs and physical market participants to hedge their risks”, he further added.
Speaking on the occasion, Mr. R. N. Ghosal, Regional President, Indo-American Chamber of Commerce said, “Since the last few years, commodity exchanges such as MCX have showcased how these regulated platforms offer immense benefits and advantages to the commodity market participants. From a transparent price discovery mechanism to lower margins and most importantly, effective price risk management, which helps them manage the risks associated with price uncertainties and volatilities.”
In his concluding remarks, Mr. Ghosal thanked FMC and MCX for organizing the awareness programme on commodity futures exclusively for the members of Indo-American Chamber of Commerce.
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.
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.