The Hindu Business Line : Rise in turnover: Gold, silver, lead, crude rule commodity bourses

Kolkata, Nov. 14 In October, the total turnover of 23 commodity exchanges in the country increased by approximately Rs 59,000 crore compared with that of the previous month. Of this, Rs 57,000 crore or 97 per cent was contributed by the Multi-Commodity Exchange (MCX) alone!

What is more surprising is that just four international commodities — gold, silver, crude oil and lead have laid the foundation of MCX’s stellar performance during the month. Together these commodities — traded on MCX — recorded a higher turnover of Rs 56,000 crore, contributing approximately 95 per cent of the total growth posted by all the exchanges put together. Market sources are unanimous that by and large, Indian commodity markets may be witnessing concentrated trading in international commodities, without much influence on the prices of these commodities.

The Forward Markets Commission data show that nine international commodities (gold, silver, copper, zinc, lead, nickel and natural gas) traded on MCX contributed 96 per cent of the total turnover between April and October this year. This, sources at some major broking houses feel, is making commodity futures market less relevant in terms of its contribution to price discovery. Sources at MCX, however, are not so pessimistic. “There are some early signs of Indian market participants dictating global prices. Six months back, when gold prices were falling in the international market, prices on MCX were ruling firm due to huge buying support,” said an exchange official.

“A number of reasons, lack of information and education have made market participants increasingly disinterested about the agricultural commodities in recent times. This has possibly led to further concentration of interest in international commodities,” the source said.