Future of the commodity markets in India

Type :

Theses

Pages :

30 pages

Format :

.doc

Published date :

03/20/2009

Category :

Economics & finance

Sub category :

Finance

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Summary :

Introduction
Industry profile
Process of commodity market
1. Trading Parameters
2. Clearing & Settlement
3. Delivery Procedure
Rick involved in the commodity market
Recent growth in the commodity market in India
Recommendations
Bibliography
Questionnaire
Conclusion

Abstract

commodity market in india till the last decade was not a major investment option as compared to the capital markets. The commodities market had its presence in the early 1960's, but later on the trading in the commodity markets was banned due to the scarcity of many commodities. The trading in commodity market was started again in November 2003, under the regulation of Forward Market Commission (FMC). Under the new regulation the commodity market has developed to a great extent. There have been improved trading facilities, proper clearing & settlements, and a good delivery procedure, set up for effecting physical delivery of commodities. The commodity market is still in its early growth stage and it has the potential to grow even at a large scale. There have been restricted market players in the commodity markets, and there is need to allow for more market players like the banks, foreign investors to facilitate the growth of the commodity markets. india has a long history of futures trading in the commodities market. The first organized futures market for the commodities was established in 1875 under the guidance of the Bombay Cotton Trade Association to trade in cotton contracts. It was the first futures markets in india. futures trading were then spread to other commodities like oil seeds, jute and food grains. The derivatives or futures trading in india however did not have continuous legal approval. Between the period 1920's &1940's, futures trading in organized form had commenced in a number of commodities such as - cotton, groundnut, groundnut oil, raw jute, jute goods, castor seed, wheat, rice, sugar, precious metals like gold and silver. However during the Second World War futures trading was prohibited under Defense of india Rules Act.