Commexes biz to grow 30 per cent

Last year,the business of four national — MCX,NCDEX,NMCE and ICEX and 19 regional commodity bourses stood at Rs 70 lakh crore despite ban on few commodities then,he said.

Asked if business at the commodity futures market would outperform the stock market this year,he said,”It may not be possible as the commodity futures market is yet to grow to match the business volumes of the stock market.”

At present,the average combined business volume from futures trading at MCX and NCDEX is about Rs 10,000 crore per day,which is seven-times lower than Rs 70,000 crore per day (from futures) in NSE and BSE,he said.

According to CPAI,a big leap in the growth of commodity futures market lies in the development of local mandis,investment in the entire supply chain besides early passage of the Forward Contract Regulation Amendment (FCRA) bill.

Agarwal said,”Till the spot markets are reformed,more growth would continue to come from futures trade in safe-haven assets,non-bullion and energy items and not from agricultural commodities.”

He reasoned that the futures price of farm commodities are not adequately integrated with the domestic mandis,which are largely controlled by the state governments. Whereas prices of bullion,metals like copper and energy go in tandem with global commodity markets hence traders interest is rising due to transparency in prices,he added.

CPAI stressed that there is no option but to develop the mandis for India to emerge as an hub for futures trade in agricultural commodities in the coming years.