MCX Developing Indian Commodity Ecosystem Joseph Massey Deputy

MCX: Developing Indian Commodity Ecosystem Joseph Massey Deputy Managing Director MCX

Why nations need commodities markets § Commodities are generic § Prices are determined on global basis – international trade – Information effect – Inter-substitutability – • Food for energy • Commodity as investment • Price related switching § Market pricing efficient & gives long term signals § All carry price risk & better to manage

Indian Contribution to Global Futures Market

Market Share of Traded Futures Volume

Share of Global Commodities in India

Share of Agri, Energy & Metals of the Total MCX Volume in Contracts Traded (2006) Energy 15% Agri 18% Metals 67%

Mini Contracts of Global commodities in Indian Time Zone • Availability of smaller contracts on Indian exchanges helps smaller traders/companies to hedge their risk • Price discovery at Indian time zone • High level of relationship between Indian and global markets in globally linked commodities

New developments expected § New products – Options and Indices (Weather, commodity, Carbon Credits, freight, etc. ) § Exchange traded funds § Banks, MFs and FIIs in commodities market § Global strategic alliance and cross listing of products § Domestic investors going global § Capital account convertibility & greater global integration

MCX Growth Story

Market Share of Global Bullion Exchanges (2006)

Market Share of Global Energy Exchanges 2006

MCX Comdex Vs Global Commodity Indices Correlation of COMDEX with: CRB Index Rogers com Index DJAIG com Index GSCI spot Index 33. 71% 83. 24% 48. 70% 69. 24%

MCX Cross Border Strategic Alliances

MCX – Reforming Commodity Ecosystem Increase the Holding Capacity Collateral Financing Grading & Standardizatio n National Level Price Discovery in Perishable & Non-Perishable Commodities, Market Infrastructure and National Reach.

Gramin Suvidha Kendras: MCX - India Post Initiatives Villagers in Dhamangaon benefiting from MCX futures commodity prices Shri S P Tayde – Village Postmaster Dhamangaon writing MCX rates on Board

Commodity Suchna Kendras: MCX Initiative An e-Ticker in Indore, Madhya Pradesh First Commodity Suchna Kendra at APMC, Vashi being inaugurated by Shri Sharad Pawar

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