The National Commodities & Derivatives Exchange (NCDEX) has emerged as the world’s third largest third largest agricultural exchange as per an article of the Geneva (Switzerland) Headquartered United Nations Conference on Trade and Development (UNCTAD).
Agricultural trading at NCDEX, which stood at 6.5 million contracts in 2004, increased by 562% - a more than six fold rise – to over 43 million traded contracts in 2005. “This made NCDEX the world’s third largest agricultural exchange, trading a considerably higher volume of agricultural contracts than the New York Board of Trade (NYBOT),” said the UNCTAD report on “The World’s Commodity Exchanges: Past, Present, Future”
Pointing out that NCDEX has undergone a spectacular rise as a hub for agricultural trade in the sub-continent, the Report (authored by Mr. Adam Gross, Associate Economic Affairs Officer, and UNCTAD) says that agriculture has been leading the commodities charge over the past five years, in volume terms at least.
“Developing country exchanges, particularly those in China and India, can now clearly be recognized as major liquidity centres in world commodity markets with eight of the world’s top 15 commodity futures exchanges in 2005 located in Asia,” said Mr. Gross in the UNCTAD report.
According to the report, commodity exchanges can play an important role in overcoming infrastructure obstacles and connect marginalized producers to the market in India.
“Most of our members and their terminals are located in smaller towns. This dispersal of points of trading terminals helps people from all over the country access the exchange for hedging their price risk,” said Mr. PH Ravikumar, MD & CEO, NCDEX. “To enable grass root level primary producers benefit from the Exchange platforms and gain direct forward market linkeages, the Exchange is already gearing itself to launch spot agricultural platforms in select states which will be gradually expanded to cover the entire country” he said.
NCDEX, according Mr. Ravikumar, is seeking to further impart transparency to futures trading in agricultural commodities by launching spot trading on the exchanges’ on their online trading platform.