A commodity exchange is an exchange where various commodities, agricultural and non-agricultural, tangible or intangible, including their derivate products and other raw materials are traded.
The commodity exchanges in India are regulated by the Securities and Exchange Board of India (SEBI) since 2015. Prior to this, the FMC or Forwards Market Commission, overseen by the Ministry of Consumer Affairs regulated the Indian commodity exchanges.
Mostly the different commodities are classified into agricultural and non-agricultural commodities. The non-agricultural commodities can be further sub-classified into three different categories – bullion, energy, and base metals. Here’s a brief list of the different types of commodities under each category that is regularly bought and sold in the exchanges.
Base Metals – Aluminium, copper, lead, nickel, and zinc
- Bullion – Gold and Silver
- Energy – Crude Oil and Gas
- Agriculture – Black Pepper, Cardamom, Castor Seed, Cotton, Palm oil, Kapas, Wheat, Paddy, Chana, Bajra, Barley, and Sugar, among others.
Most commodity markets across the world trade in agricultural products and contracts based on them. These contracts can include spot prices, forwards, futures and options on futures.
There are six commodity exchanges in India.
- National Multi Commodity Exchange, established in 2002, Headquarter : Ahmedabad.
Trading Commodities : Castor Seeds, Rapeseed, Mustard, Soyabean, Seasame, Copra, Black Pepper, Gram, Gold, Aluminium, Copper, Lead, Nickel, Zinc, Rubber, Jute, Coffee, Isabgoal,etc.
- Multi Commodity Exchange of India Ltd. (MCX), established in November, 2003, Headquarter : Mumbai.
Trading Commodities : Metal, Bullion, Fibres, Energy, Spices, Plantations, Pulses, Petrochemicals, Cereals,etc.
- National Commodity and Derivative Exchange Limited (NCDEX), established in December, 2003, Headquarter : Mumbai.
Trading Commodities : Cereals & Pulses, Fibres, Oil & Oil Seeds, Spices, Plantation Products, Gold, Silver, Steel, Copper, Crude Oil, Brent Crude Oil, Poluvinyl Chloride, etc.
- Indian Commodity Exchange (ICEX), established in November, 2009, Headquarter : Gurgaon.
Trading Commodities : Gold, Silver, Copper, Lead, Crude Oil, Natural Gas, Mustered, Soyabean, Soyabean Oil, Jute, Menthe Oil, Iron Ore, etc.
- Shariah Index, established in December, 2010, Headquarter : Gurgaon.
This is the first Shariah index created in India utilizing the strict guidelines and local expertise of a domestic Shariah Advisory Board. The index comprises the 50 largest and most liquid shariah compliant stocks within BSE-500.
- Universal Commodity Exchange, established in April, 2013.
It’s a national level electronic commodity exchange in India.
Trading Commodities : Gold, Silver, Crude Oil, Chana, Rubber, Mustard, Soyabean, Refined Soya Oil, Turmeric, etc.