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

Marwadi Shares and FinanceLtd.

Company guide-Mr. Bhavik Shah

2014-16 PGP-GBM

Submittedby- Submittedto-Nikunjsinh sodha(241) Prof. Daisy Kurin PGP-GBM (SIP) 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 onglobal 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 assignedFor 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 informalover-the-counterfinancial marketby whichcontracts for future deliveryare entered into. Standardized forward contracts are calledfutures contractsand traded on afutures exchange

.

To visit different web site of Global exchangesCOMEX (Commodities Exchange)NYMEX(New York Mercantile Exchange)CBOT(Chicago Board of Trade)LME(London Metal Exchange)Kitco.comBloomberg.comFoxstreet.comMoneycontrol.comNetdania.com

Commodity Indusry AnalysisINTRODUCTION

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 EXCHANGESA 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 23rd 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, Menthaoil, 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 parboiledRice (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 de-mutulized 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 25th 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.KetanMarwadi(Chairman) Mr. Deven Marwadi Mr. Sandeep MarwadiGeneralManager:Mr.HareshbhaiManiarYear of establishment:-1992Head office:-Marwadi Shares and Finance Ltd. Near Kathiawar gymkhana,Dr. Radha Krishna Road.Rajkot-360001Phone No:- (0281)2481313E-mail:-SMARWADI@HOTMAIL.COMWEB SITE:-WWW.MARWADIONLINE.COMAWARDS & CERTIFICATE:-ISO 9002 (For demat services)Form of organisation:-PVT. Ltd.WEEKLY OFF:-SundayBranches:- Ahmedabad,Mumbai,Delhi,Surat,Anand,Baroda,Porbandar,Junagadh,BhujCOMPANY PROFILEBasic IntroductionMarwadi 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 thefutures and options market using their research and tools. To start trading in Equity, all youneed to do is open an online trading account. You can call them and they will have theirrepresentative meet you. You can get help opening the account and get guidance on how totrade in Equity.

Commodity:You can enter the whole new world of commodity futures. Investors looking for afast-paced dynamic market with excellent liquidity can NOW trade in Commodity FuturesMarket. The Commodity Exchange is a Public Market forum and anyone can play in thesevital Commodity Markets. Marwadi Commodity Broker (P) Ltd can certainly be your pointof entry to the Commodity Markets. Marwadi is a registered trading-cum-clearing member ofNCDEX and MCX.

Internet Trading:Making the right trade at the right time! E-Broking service, which brings youexperience 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 reachingdistribution 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 incase 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 byenabled the interline investors to subscribes qualitative IPOs

Mutual Funds:Transact in a wide range of Mutual Funds. Mutual Funds are an attractive means ofsaving taxes and diversifying your investment portfolio. So if you are looking to invest inmutual funds, Marwadi offers you a host of mutual fund choices under one roof; backed byin-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 gambleonly on the recommendations from your friends and the information overload frommagazines and financial dailies? And, of course, more importantly, if you happen to be aHigh Net worth Individual, do you have the time to judge which advice is reliable, authenticand has the least chance of failure? With Marwadi PMS, you can be assured that yourinvestments are in safe hands! Give your portfolio the expert edge to smoothly steer towardswealth 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 atall the certain Saurashtra and Kutch where placed either a branch or franchise or sub broker

SERVICES OF MARWADI:

Stock broking:Cash MarketDerivatives TradingMargin TradingInternet TradingCommodities Broking:Commodities FuturesFinancing Against Commodities

Depository Service:NSDLCDSL

IPO Subscription Services

Mutual Fund Products

Portfolio management

Insurance Services

Qualitative Research in Stock & Commodities

FUTURE SERVICES:Private Banking SectorForex MarketCommodities Demat ServiceProduct 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 bandwidthleased lines, secure services and a customs-built user interface give you an internationalstandards 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 terminals-Money 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 keyboardDepository Participant Services:It offers DP services mean hassle-free, speedy settlements. It is depositoryparticipants 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 Limited2. Central Depository Services of India Limited

Other Services of company:

1. Mutual Fund Distribution2. Distribution of Life and General Insurance products3. Portfolio Management services4. NPS Distribution

Track Record & Other strengths:

1. 100% uninterrupted trading as our terminals has always been on.2. High compliance standards and clean records among regulatory.3. Speed of execution of trades is the major strength4. Average 2, 25,000 + trades, everyday.5. Personalized services6. .

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