24 June, 2021

Commodity Exchanges And Their Role In The Indian Economy

Commodity Exchanges And Their Role In The Indian Economy

When the Union government in 2002 allowed the setting up of national multi commodity derivative exchanges, MCX was one of the first commodity exchanges to be created. Leveraging on innovative product design, sound domain knowledge, and cutting-edge technology, commodity exchanges grew at a pace unprecedented in any other industry. According to Futures Industry Association, MCX was world’s seventh largest commodity exchange during 2017, by the number of commodity futures contracts traded. Today, the Exchange and its subsidiary, the MCX Clearing Corporation Ltd., offer trading and settlement services respectively in derivative contracts across varied commodity segments including bullion, industrial metals, energy and agricultural commodities.

The existence of an institution like MCX, and the commodity market it serves, is beneficial for multiple stakeholders in the economy – from producers to traders and end-consumers - irrespective of their direct involvement in derivatives trading. Directly, this market helps producers, traders and other commodity stakeholders...

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