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Commodity markets are the markets wherein raw or primary products
are exchanged. These raw commodities are traded on regulated
commodity exchanges in which they are bought and sold in standardized
contracts. This is called commodity trading.
Commodity trading is not a new phenomenon in India. It has
existed since the early 1970s. But due to various governmental
restrictions imposed, it could not develop further. Recently,
most of these restrictions were removed, which saw a growth
in this area.
The usefulness of commodity trading in future lies in the
fact that it results in transparent and fair prices on account
of large-scale participation of entities associated with different
value chains. It also reflects views and expectations of a
wider section of people who may be related to a particular
commodity. It also provides an effective platform for managing
price risks to all the segments of players who participate
in the commodity trading, ranging from producers, traders,
and processors to exporters/importers and end-users of a commodity.
For more information on commodity trading, click on www.mcxindia.com.
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