Study of Indian Commodity Market 1st june 2015 to 31st july 2015

Marwadi Shares and Finance

Ltd.

Company guide-Mr. Bhavik Shah

2014-16
PGP-GBM

Submitted byNikunjsinh sodha(241)

PGP-GBM (SIP)

Submitted toProf. Daisy Kurin

SCOPE OF THE PROJECT

The study mainly focuses on Indian commodity market, its history and latest
developments in the country in commodities market . The study also keeps a birds-eye
view on global commodity market and its development. The study vastly covered the
aspects of commodity trading , clearing and Settlement mechanisms in Indian
commodity exchanges. The scope of the study is limited to Indian commodity market
trading processes
Functioning
survey
meeting dealers
satisfaction assessment
why are people not becoming dealers in this market?
Operations
awareness check growth evolution //structure//method of operation //
govt regulations and rules for the market
future prospects
exchanges involved and their structure and functioning
Processes
steps to become a dealer

Task assigned
For now we have to make a report on commodity market
Define commodity
Commodity Derivative
Commodity exchanges:-ICX MCX NCDEX
There is 2 types of trading involved
-Future Trading
It involve national broker,local broker like Marwadi share & finance ltd.
And his client are like HUF etc.
-Physical Trading
It involve APMC(Agriculture product market committee)mundi,National
mundies they supply to wholeseller and wholeseller supply to retailer
and retailer to household
-Forward market
It is the informal over-the-counter financial market by which contracts for future
delivery are entered into. Standardized forward contracts are called futures
contracts and traded on a futures exchange
.

Govt. of India
Financial Ministry
Forward Market Commisson
cli
en
t
National
broker Local
borker
All Exchanges like MCX
NCDEX NMC

To visit different web site of Global exchanges

COMEX (Commodities Exchange)
NYMEX(New York Mercantile Exchange)
CBOT(Chicago Board of Trade)
LME(London Metal Exchange)
Kitco.com
Bloomberg.com
Foxstreet.com
Moneycontrol.com
Netdania.com

Commodity Indusry Analysis

INTRODUCTION
Indian markets have recently thrown open a new avenue for retail investors and
traders to participate commodity derivatives.

For those who want to diversify their

portfolios beyond shares, bonds and real estate, commodities are the best option.
Till some months ago, this wouldnt have made sense. For retail investors could
have done very little to actually invest in commodities such as gold and silver or
oilseeds in the futures market. This was nearly impossible in commodities except for
gold and silver as there was practically no retail avenue for pumping in commodities.
However, with the setting up of three multi-commodity exchanges in the country,
retail investors can now trade in commodity futures without having physical stocks.
Commodities actually offer immense potential to become a separate asset class
for market-savvy investors, arbitrageurs and speculators. Retail investors, who claim to
understand the equity markets, may find commodities an unfathomable market. But
commodities are easy to understand as far as fundamentals of demand and supply are
concerned. Retail should understand the risk advantages of trading in commodities
futures before taking a leap. Historically, pricing in commodities futures has been less
volatile compared with equity and bonds, thus providing an efficient portfolio
diversification option.
In fact, the size of the commodities markets in India is also quite significant. Of
the countrys GDP of Rs.13,20,730 crore( Rs.13,207.3 billion), commodities related
( and dependent) industries constitute about 58 per cent.
Currently, the various commodities across the country clock an annual turnover
of Rs.1,40,000 crore ( Rs.1,400 billion). With the introduction of futures trading, the
sizes of the commodities market grow many folds here on.

DEFINITION OF COMMODITIES

Any product that can be used for commerce or an article of commerce which
is traded on an authorized commodity exchange is known as commodity. The article
should be movable of value, something which is bought or sold and which is produced
or used as the subject or barter or sale. In short commodity includes all kinds of goods.
Forward Contracts (Regulation) Act (FCRA), 1952 defines goods as every kind of
movable property other than actionable claims, money and securities.
In current situation, all goods and products of agricultural (including plantation),
mineral and fossil origin are allowed for commodity trading recognized under the FCRA.
The national commodity exchanges, recognized by the Central Government, permits
commodities which include precious (gold and silver) and non-ferrous metals: cereals
and pulses; ginned and un-ginned cotton; oilseeds, oils and oilcakes; raw jute and jute
goods; sugar and gur;potatoes and onions; coffee and tea; rubber and spices. Etc.
In the world of business, a commodity is an undifferentiated product whose
market value arises from the owners right to sell rather than to use.

Example

commodities from the financial world include oil (sold by the barrel), wheat, bulk
chemicals such as sulfuric acid and even pork bellies.

NEED OF COMMODITY MARKET IN INDIA

Achieving hedging efficiency is the main reason to opt for futures contracts. For
instance, in February, 2007, India had to pay $ 52 per barrel more for importing oil than
what they had to pay a week ago. The utility of a futures contact for hedging or risk
management presupposes parallel or near-parallel relationship between the spot and
futures prices over time. In other words, the efficiency of a futures contract for hedging
essentially envisages that the prices in the physical and futures markets move in close
unison not only in the same direction, but also by almost the same magnitude, so that
losses in one market are offset by gains in the other.
Of course, such a price relationship between the spot and futures markets is
subject to the amount of carrying or storage costs till the maturity month of the futures
contract. Theoretically ( and ideally), in a perfectly competitive market with surplus
supplies and abundant stocks round the year, the futures price will exceed the spot
price by the cost of storage till the maturity of the futures contract. But such storage
cost declines as the contract approaches maturity, thereby reducing the premium or
contango commanded by the futures contract over the spot delivery over its life and
eventually becomes zero during the delivery month when the spot and futures prices
virtually converge. The efficiency of a futures contract for hedging depends on the
prevalence of such an ideal price relationship between the spot and futures markets.

COMMODITIES EXCHANGES

A brief description of commodity exchanges are those which trade in particular

commodities, neglecting the trade of securities, stock index futures and options etc.,
In the middle of 19th century in the United States, businessmen began organizing
market forums to make the buying and selling of commodities easier. These central
market places provided a place for buyers and sellers to meet, set quality and quantity
standards, and establish rules of business.

Agricultural commodities were mostly

traded but as long as there are buyers and sellers, any commodity can be traded.
The major commodity markets are in the United Kingdom and in the USA. In

India there are 25 recognized future exchanges, of which there are three national
level multi-commodity exchanges. After a gap of almost three decades, Government of
India has allowed forward transactions in commodities through Online Commodity
Exchanges, a modification of traditional business known as Adhat and Vayda Vyapar to
facilitate better risk coverage and delivery of commodities.
THE THREE EXCHANGES ARE

National Commodity & Derivatives Exchange Limited ( NCDEX)

Multi Commodity Exchange of India Limited ( MCX)

National Multi-Commodity Exchange of India Limited ( NMCEIL)

All the exchanges have been set up under overall control of Forward Market
Commission (FMC) of Government of India.

ROLE OF EXCHANGES

National Commodities & Derivatives Exchange Limited (NCDEX)

National Commodities & Derivatives Exchange Limited(NCDEX) promoted by ICICI

Bank Limited (ICICI Bank), Life insurance corporation of India (LIC), National Bank of
agriculture and Rural Development (NABARD) and National Stock Exchange of India
Limited(NSC). Punjab National Bank (PNB), Credit Ratting Information service of India
Limited (CRISIL), Indian Farmers Fertilizer Cooperative limited (IFFCO),Canara bank
and Goldman saches by subscribing to the equity shares have joined the promoters as
a share holder of exchange. NCDEX is the only commodity exchange in the country
promoted by nation institutions.
NCDEX is a public limited company incorporated on 23 rd April 2003.NCDEX Is a
national level technology driven on line commodity exchange with an independent board
of Directors and professionals not having any vested interest in commodity markets. It is
committed to provide a world class commodity exchange platform for market
participants to trade in a wide spectrum of commodity derivatives driven by best global
practices, professionalism and transparency. NCDEX is regulated by Forward Market
Commission(FMC).NCDEX is also subjected to the various laws of land like the
companies act, stamp act, contracts act, forward contracts regulation act and various
other legislations. NCDEX is located in Mumbai and offers facilities to its members in
more than 550 centres through out India. NCDEX currently facilitates trading of 60
commodities.
Commodities Traded at NCDEX:Bullion:Gold KG, Silver, Brent
Minerals:Electrolytic Copper Cathode, Aluminium Ingot, Nickel Cathode, Zinc Metal Ingot, Mild
steel Ingots
Oil and Oil seeds:Cotton seed, Oil cake, Crude Palm Oil, Groundnut (in shell),Groundnut expeller Oil,
Cotton, Mentha oil, RBD Pamolein, RMseed oil cake, Refined soya oil, Rape
seeds, Mustard seeds,Caster seed, Yellow soybean, Meal
Pulses:Urad, Yellow peas, Chana, Tur, Masoor,
Grain:Wheat, Indian Pusa Basmati Rice, Indian parboiled Rice (IR-36/IR-64), Indian raw Rice
(ParmalPR-106), Barley, Yellow red maize

Spices:Jeera, Turmeric, Pepper

Plantation:Cashew, Coffee Arabica, Coffee Robusta
Fibers and other:Guar Gum, Guar seeds, Guar, Jute sacking bags, Indian 28mm cotton, Indian 31mm
cotton, Lemon, Grain Bold, Medium Staple, Mulberry, Green Cottons, , , Potato, Raw Jute,
Mulberry raw Silk, V-797 Kapas , Sugar, Chilli LCA334
Energy:Crude Oil, Furnace oil

Multi Commodity Exchange of India Limited (MCX)

Multi Commodity Exchange of India Limited (MCX) is an independent and demutulized exchange with permanent reorganization from Government of India, having
Head Quarter in Mumbai. Key share holders of MCX are Financial Technologies (India)
Limited, State Bank of India, Union Bank of India, Corporation Bank of India, Bank of
India and Cnnara Bank. MCX facilitates online trading, clearing and settlement
operations for commodity futures market across the country.
MCX started of trade in Nov 2003 and has built strategic alliance with Bombay
Bullion Association, Bombay Metal Exchange, Solvent Extractors Association of India,
pulses Importers Association and Shetkari Sanghatana.
MCX deals with about 55 commodities.

Commodities Traded at MCX:

Bullion:Gold, Silver, Silver Coins,

Minerals:Aluminium, Copper, Nickel, Iron/steel, Tin, Zinc, Lead

Oil and Oil seeds:Castor oil/castor seeds, Crude Palm oil/ RBD Pamolein, Groundnut oil,
Mustard/ Rapeseed oil, Soy seeds/Soy meal/Refined Soy Oil, Coconut Oil
Cake, Copra, Sunflower oil, Sunflower Oil cake, Tamarind seed oil,

Pulses:Chana, Masur, Tur, Urad, Yellow peas

Grains:Rice/ Basmati Rice, Wheat, Maize, Bajara, Barley,

Spices:Pepper, Red Chili, Jeera, Cardamom, Cinnamon, Clove,

Ginger,

Plantation:Cashew Kernel, Rubber, Areca nut, Betel nuts, Coconut,

Coffee,

Fiber and others:Kapas, Kapas Khalli, Cotton (long staple, medium staple,
short staple), Cotton Cloth, Cotton Yarn, Gaur seed and
Guargum, Gur and Sugar, Khandsari, Mentha Oil, Potato, Art
Silk Yarn, Chara or Berseem, Raw Jute, Jute Goods, Jute
Sacking,

Petrochemicals:High Density Polyethylene (HDPE), Polypropylene (PP), Poly

Vinyl Chloride (PVC)

Energy:Brent Crude Oil, Crude Oil, Furnace Oil, Middle East Sour
Crude Oil, Natural Gas

National Multi Commodity Exchange of India Limited (NMCEIL)

National Multi Commodity Exchange of India Limited (NMCEIL) is the first
de-mutualised Electronic Multi Commodity Exchange in India. On 25 th July 2001 it
was granted approval by Government to organize trading in edible oil complex. It
is being supported by Central warehousing Corporation Limited, Gujarat State
Agricultural Marketing Board and Neptune Overseas Limited. It got reorganization

in Oct 2002. NMCEIL Head Quarter is at Ahmedabad.

ABOUT COMPANY
Marwadi Shares and Finance Ltd.

Directors: Mr. Ketan Marwadi(Chairman) Mr. Deven Marwadi Mr. Sandeep Marwadi
General Manager: Mr. Hareshbhai Maniar
Year of establishment:-1992
Head office:-Marwadi Shares and Finance Ltd. Near Kathiawar gymkhana,Dr. Radha
Krishna Road.Rajkot-360001
Phone No:- (0281)2481313
E-mail:-SMARWADI@HOTMAIL.COM
WEB SITE:-WWW.MARWADIONLINE.COM
AWARDS & CERTIFICATE:-ISO 9002 (For demat services)
Form of organisation:-PVT. Ltd.
WEEKLY OFF:-Sunday
Branches:- Ahmedabad,Mumbai,Delhi,Surat,Anand,Baroda,Porbandar,Junagadh,Bhuj

COMPANY PROFILE
Basic Introduction

Marwadi Shares and Finance Ltd. Is one of the best Gujarat based financial services
group dealing in equities, commodities broking and portfolio management services.
During the last 23 years it has grown into a network of more than 90 branches with a
700+ committed human assets and 1450+ subbrokers/ authorised persons across India.
They have kept the faith of over 3.05 +lakhs investors and it's growing. After
establishing supremacy in Gujarat, they are now expanding nationwide and to fuel their
growth plans they have raised capital from UK-based investment companies."Marwadi
also enjoys the status of the `Biggest Broking Company in the Saurashtra Region

History

Marwadi Sales and Finance P. Ltd. started in the year 1994 when acquired membership
of National Stock Exchange of India Ltd. That was the time when Govt. had just started
liberalization. Capital market being at the base of every thing else was among the first
few sectors taken up for liberalization and alignment with global benchmarks. NSE was
therefore a result of Governments policy to modernize stock market and give our
investors a cost - effective trading and settlement system
They enter into the stock market coincided with Government's initiative to give a
modern Stock exchange. Marwadi had then very presciently felt that this
development would change the very structure and content of the market. Then,
when Depository system was introduced to automate the settlement system, we
became the first Corporate DP in 1998 to bring this concept to investor's
doorstep in Saurashtra. Marwadi had very early on seen that the future lay in the
ability to network and use technology to its fullest possible extent.

Relying on customer judgment, they used technology extensively which resulted in

efficient client servicing. It also saw the synergy that lay in providing a bouquet of
services under one roof. It is this realization that led them in the year 2003 to go for
membership of National Level Commodity Exchanges, which were set up as part of
Govt's policy to bring commodity market on par with the capital market in terms of

integrity and practices. They bold initiatives starting with their journey from capital
market up to commodities market has given them synergies in operations, enabling
them to pass on the advantage to customers. As an organization, have achieved a
leader's position by ensuring total satisfaction of customers through world class
services. Utilize ultra modern technology for timely, seamless and accurate data
processing. Proactively seek customers feedback in improving upon their service
delivery modes. Promptly respond to customer issues in order to maximize clients
satisfaction.

Products & Services offers:

Equity & Derivatives:

Can look for an easy and convenient way to invest in equity and take positions in the
futures and options market using their research and tools. To start trading in Equity, all
you
need to do is open an online trading account. You can call them and they will have their
representative meet you. You can get help opening the account and get guidance on
how to
trade in Equity.
Commodity:
You can enter the whole new world of commodity futures. Investors looking for a
fast-paced dynamic market with excellent liquidity can NOW trade in Commodity
Futures
Market. The Commodity Exchange is a Public Market forum and anyone can play in
these
vital Commodity Markets. Marwadi Commodity Broker (P) Ltd can certainly be your
point
of entry to the Commodity Markets. Marwadi is a registered trading-cum-clearing
member of
NCDEX and MCX.
Internet Trading:
Making the right trade at the right time! E-Broking service, which brings you
experience of online buying and selling of shares with just a click.

A detail resource like live quotes, charts, research and advice helps you take proper
decisions. Their robust risk management system and 128 bit encryption gives you a
complete security about money, shares, and transaction documents.
IPO:
An active player in the primary market with waste customer base and reaching
distribution network spread through out the lands. Then breathe Saurashtra peninsula.
Marwadi offer bidding for all booked bills IPOs being floated through NSE network.
Marwadi offer services to customer such as advises on the minimum lot to applied in
case of refer and details and data to be furnished into IPO form.
Marwadi scripts even fill up the form for related clients.
Marwadi offer bidding services at all major location in Saurashtra and Kutch there by
enabled the interline investors to subscribes qualitative IPOs
Mutual Funds:
Transact in a wide range of Mutual Funds. Mutual Funds are an attractive means of
saving taxes and diversifying your investment portfolio. So if you are looking to invest in
mutual funds, Marwadi offers you a host of mutual fund choices under one roof; backed
by
in-depth information and research to help you invest smartly
PMS:
Can you analyze the prices of 1,500 shares every morning? Can you afford to gamble
only on the recommendations from your friends and the information overload from
magazines and financial dailies? And, of course, more importantly, if you happen to be a
High Net worth Individual, do you have the time to judge which advice is reliable,
authentic
and has the least chance of failure? With Marwadi PMS, you can be assured that your
investments are in safe hands! Give your portfolio the expert edge to smoothly steer
towards
wealth creation.
Cash Market Services:
Marwadi also F & O market to all clients in to entire Saurashtra and Kutch region,
which they cover through, distributed cover.
Marwadi offer cash market trading services for the both retail and in station clients at
all the certain Saurashtra and Kutch where placed either a branch or franchise or sub
broker
SERVICES OF MARWADI:
Stock broking:
Cash Market
Derivatives Trading
Margin Trading
Internet Trading

Commodities Broking:
Commodities Futures
Financing Against Commodities
Depository Service:
NSDL
CDSL
IPO Subscription Services
Mutual Fund Products
Portfolio management
Insurance Services
Qualitative Research in Stock & Commodities
FUTURE SERVICES:
Private Banking Sector
Forex Market
Commodities Demat Service
Product Enhancement in commodity market
Stock broking:
It offers complete range of pre-trade and post-trade services on the BSE and the NSE.
Whether an investor come into its conveniently environment, or issue instruction over
the phone, its highly trained team and sophisticated equipment ensure smooth
transactions and prompt services.
E-Broking and Web-Based Services:
It is one of the offers online trading on site www.marwadionline.com, high bandwidth
leased lines, secure services and a customs-built user interface give you an
international
standards trading experience. It also gives regular trading hours, and access to
information,
analysis of information, and a range of monitoring tools.
Trading Terminals-Money pore Express:
It offer its sub-broker and approved/authorized user fully equipped trading terminalsMoney pore Express, at the location of investors choice. It is fully functional terminal,
variety of helpful features like market watch, order entry, order confirmation, charts,
andtrading calls, all available in resizable windows. And it can be operated through the
keyboard

Depository Participant Services:

It offers DP services mean hassle-free, speedy settlements. It is depository
participants with NSDL and CDSL.
Premium Research Services:
Its research team offers a package of fee-based services, including daily technical
analysis, research reports, and advice on clients existing investments. It is research
beyond desk and company-provider reports. If you have an equity portfolio, you know
that the pace of life in the world of stocks and shares is frantic. Managing your portfolio
means you have to take firm, informed decisions, and quickly!

The company is having trading and clearing membership of

1. National Stock Exchange of India Ltd. (Equity, Derivatives, Currency Derivatives &
Mutual Funds Online)
2. Bombay Stock Exchange Ltd. (Equity, Derivatives & Currency Derivatives)
3. MCX Stock Exchange Limited (Currency Derivatives)
4. MCX & NCDEX (Commodity Future Trading Segment)
5. NCDEX Spot Exchange
The company is Depository Participants of
1. National Securities Depository Limited
2. Central Depository Services of India Limited
Other Services of company:
1.
2.
3.
4.

Mutual Fund Distribution

Distribution of Life and General Insurance products
Portfolio Management services
NPS Distribution

Track Record & Other strengths:

1.
2.
3.
4.
5.
6.

100% uninterrupted trading as our terminals has always been on.

High compliance standards and clean records among regulatory.
Speed of execution of trades is the major strength
Average 2, 25,000 + trades, everyday.
Personalized services
.

Major Players in Broking Industry

Limitation of the study:

We can only do project on one topic because of not adequate time.

Spot price varying from shop to shop

Commission has not included spot prices of the commodity

References

http://investmentz.co.in

http://www.finance.indiamart.com

http://finance.indiamart.com/markets/commodity/

http://www.commoditiescontrol.com

http://www.marwadionline.com/

http://www.mcxindia.com/

http://www.ncdex.com/MarketData/LiveFuturesQuotes.aspx