Commodities are the things that human beings use in order to create a livable world. In layman’s language, commodities are the building blocks of any economy. These include gold, Crude oil, uranium, wheat, coal etc.
Investors, consumers, speculators, farmers and many more, buy and sell commodities for a number of reasons. One can buy or sell these directly or through commodity exchange. The commodity exchange market is based on the principle of demand and supply.
This is a product, that has a uniform quality and can be traded across various markets. Hence, in short, commodities are things produced or grown and traded in various markets all around the globe.
A commodity should generally meet the following criteria
- Commodities must be trade-able. For instance, Exchange Traded Funds (ETFs).
- These should be deliverable. For instance, wheat, crude oil and so on as these can be delivered.
- Commodities should have liquidity. This is important as it gives the option to the investor to easily get in and out of the investments without facing any difficulty.
Commodity Exchanges in India
In India commodity futures market started more than thousands of years ago. Indian Mythologies has such kind of references to these markets in Kautialya’s ‘Arthasastra’.
Following are the Top 3 Commodity Exchanges in India
- MCX - Multi Commodity Exchange of India Ltd was established in 2003 as an independent commodity exchange having its base in Mumbai.
- NCDEX - National Commodity & Derivatives Exchange Limited with Headquaters in Mumbai was founded in 2003.
- NMCE - National Multi Commodity Exchange of India with Headquaters in Ahmedabad was founded in 2002 This was India‘s first online multi commodity exchange.
Commodities traded in NCDEX
Cereals and pulses
- Bajra
- Barley
- Chana
- Chana 1 MT/2 MT
- Maize-feed/industrial grade
- Wheat
Precious metals
- Gold
- Gold Hedge
- Gold Hedge ( 100 g )
- Silver
- Silver Hedge
- Silver Hedge 5 kg
Fibers
- v-797 Kapas
- Shankar Kapas
- 29mm Cotton
Metal
- Steel long commercial
- Steel
- Copper
Oil and oil seeds
- Castor seeds
- Castor Seed 1 MT/2 MT
- Cotton seed oilcake
- Soybean
- Refined soy oil
- Mustard seed
- Mustard seed 2 MT
- Crude palm oil
Energy
- Crude oil
- Brent crude oil
Plantation
- Rubber
Soft
- Sugar
- Gur
Guar complex
- Guar seeds
- Guar seeds 10 MT
- Guar gum
Others
- Potato
Spices
- Pepper
- Turmeric
- Jeera
- Chilli
- Coriander
Commodities traded in NMCE
Oils and Oil Seeds
- Castor Seed
- Copra
- Soybean Oil
- Rape/Mustard Seed
- Guar Seed
Pulses
- Chana
Others
- Rubber
- Rubber Mini
- Sacking
- Raw Jute
- Coffee Rep Bulk
- Isabgul Seed
- Spices
- Pepper
- Cardamom
Commodities traded in MCX
- Aluminium
- Cardamom
- Copper
- Cotton
- Crude Oil
- Crude Palm Oil
- Gold
- Kapas
- Lead
- Mentha Oil
- Natural Gas
- Nickel
- Silver
- Zinc
