A WELL REGULATED PAN-INDIA ELECTRONIC SPOT MARKET CONVERGING WITH A FUNCTIONAL DERIVATIVES MARKET NEED OF HOUR: PHD CHAMBER

A WELL REGULATED PAN-INDIA ELECTRONIC SPOT MARKET CONVERGING WITH A FUNCTIONAL DERIVATIVES MARKET NEED OF HOUR: PHD CHAMBER

A WELL REGULATED PAN-INDIA ELECTRONIC SPOT MARKET CONVERGING WITH A FUNCTIONAL DERIVATIVES MARKET NEED OF HOUR: PHD CHAMBER

No.PR-22

May 9, 2018

New Delhi

 

A WELL REGULATED PAN-INDIA ELECTRONIC SPOT MARKET CONVERGING WITH A FUNCTIONAL DERIVATIVES MARKET NEED OF HOUR: PHD CHAMBER

 

PHD Chamber of Commerce and Industry has emphasised the need for a well regulated, pan-India electronic spot market converging with a functional derivatives market as it would help farmers to get a better and more stable prices for their produce.

 

President, PHD Chamber, Mr. Anil Khaitan while speaking at a Seminar on “Commodities – Are we at Resurgence: Integration of Spot and Future” under aegis of PHD Chamber of Commerce and Industry held here today argued that such a convergence of spot and futures prices would also enhance the effectiveness of commodity ecosystem and connect farmers to a transparent, market-driven production system.

 

However, the President of the Chamber reminded the government that for developing robust derivatives market in farm produce, the government should desist from imposing sudden restrictions due to production or price fluctuations.

 

According to him, the prevailing spot market platforms like the electronic National Agriculture Market (eNAM) need a robust dispute-resolution mechanism with evolving situations. 

 

Mr. Khaitan pointed out that a large number of participants in pan-India trading platforms like eNAM would lead to transparent price discovery and eliminates possibility of manipulative practices like cartelization.

 

According to the Chamber, one of the most important virtues of a successful commodities trader or investor is the ability to exercise discipline and to stick to a trading plan. When considering an investment position, a well established plan including how much risk one is willing to take and make sure the reward one seeks is equal or higher than that risk.  Therefore, it should be always remember that in the volatile world of commodities investing, there is always another chance right around the corner.

 

Chairman, Capital Market and Commodity Market Committee, PHD Chamber, Mr. B K Sabharwal emphasized saying that commodities are highly volatile and cyclical assets. Each commodity has specific supply and demand fundamentals. During bull markets, commodities tend to rally to prices where producers increase output, inventories grow and demand recedes. Conversely, during bear markets they tend to fall to prices where production slows, inventories shrink and demand increases.

 

In the Seminar other speakers such as Head, Business Development & CSQ, MCX, Mr. Naveen Mathur; Chairman, Globe Capital Market Ltd., Mr. Ashok Agarwal; President, CPAI, Mr. Sanjay Rawal including Director (Finance), PHD Chamber, Mr. Abhi Narayan Mishra also collectively felt that commodity prices in the first eleven to twelve years of the new millennium experienced a massive bull market. The prices of many raw materials exploded higher over a little more than a decade, moving the commodity sector from an alternative asset class to the mainstream for investors and traders around the world.

Ends.

Koteshwar Prasad Dobhal

Consultant (PR)