The turnover on commodity exchanges dipped seven per cent to Rs 696,348 crore (Rs 745,970 crore) in the first fortnight of March, according to the Forward Markets Commission data.

The fall in turnover followed the Government announcing imposition of transaction tax on all non-agriculture commodities trading in the Budget.

The tax came into effect from April 1.

A sharp drop in agriculture futures dragged the overall turnover in the first half of March. Agriculture commodity turnover was down 35 per cent at Rs 80,914 crore (Rs 123,538 crore).

Bullion turnover slipped 20 per cent to Rs 307,055 crore (Rs 379,994 crore). In contrast, the turnover of metals other than bullion was up 10 per cent at Rs 148,062 crore (Rs 134,239 crore) while that of energy rose 48 per cent to Rs 160,318 crore.

Ajay Kumar Kedia of Kedia Commodity Comtrade said that investors have started shifting out of the commodity market to currency futures, which is less volatile and more cost-effective.

This development, he said, also pulled down the agriculture turnover in commodity exchanges.

SO FAR, THIS FISCAL

Turnover was down five per cent at Rs 16,479,189 crore (Rs 17,369,551 crore) this fiscal up to March 15. Cumulative bullion turnover plunged 23 per cent to Rs 7,633,265 crore (Rs 9,859,515 crore) even though agriculture commodity registered a marginal increase of three per cent at Rs 2,101,278 crore (Rs 2,033,200 crore).

Turnover on the country’s largest commodity exchange MCX slipped three per cent to Rs 598,742 crore (Rs 615,866 crore) in the fortnight ended March 15. The turnover on agriculture-focused NCDEX was down 35 per cent to Rs 55,496 crore (Rs 85,588 crore).

EXCHANGES HIT

The smaller exchanges seem to have been hit more severely. ACE turnover was down 34 per cent at Rs 4,432 crore (Rs 6,707 crore) and on the NMCE it halved to Rs 12,762 crore (Rs 25,807 crore). On ICEX, it was down at Rs 1,862 crore (Rs 8,913 crore).

suresh.iyengar@thehindu.co.in

(This article was published on April 1, 2013)
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