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Definition of 'Commodities Market':

A physical or virtual marketplace for buying, selling and tradingraw or primary products. For investors' purposes there are

currently about 50 major commodity markets worldwide that

facilitate investment trade in nearly 100 primary commodities.

Commodities are split into two types: hard and soft

commodities. Hard commodities are typically natural resources

that must be mined or extracted (gold, rubber, oil, etc.),

whereas soft commodities are agricultural products or livestock

(corn, wheat, coffee, sugar, soybeans, pork, etc.)

There are numerous ways to invest in commodities. An investor

can purchase stock in corporations whose business relies on

commodities prices, or purchase mutual funds, index funds or

exchange-traded funds (ETFs) that have a focus oncommodities-related companies. The most direct way of

investing in commodities is by buying into a futures contract.

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INDIAN COMMODITY MARKET:

India commodity market consists of both the retail and the

wholesale market in the country. The commodity market in

India facilitates multi commodity exchange within and outside

the country based on requirements. Commodity trading is one

facility that investors can explore for investing their money. The

India Commodity market has undergone lots of changes due to

the changing global economic scenario; thus throwing up many

opportunities in the process. Demand for commodities both in

the domestic and global market is estimated to grow by four

times than the demand currently is by the next five years.

Commodity Trading

Commodity trading is an interesting option for those who wish

to diversify from the traditional options like shares, bonds and

portfolios. The Government has made almost all commodities

entitled for futures trading. Three multi commodity exchanges

have been set up in the country to facilitate this for the retail

investors. The four national exchanges in India are:

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y Multi Commodity Exchange (MCX)

y National Commodity and Derivatives Exchange (NCDEX)

y Indian Commodity Exchange (ICEX)

y National Multi-Commodity Exchange (NMCE)

Commodity trading in India is still at its early days and thus

requires an aggressive growth plan with innovative ideas.

Liberal policies in commodity trading will definitely boost the

commodity trading. The commodities and future market in the

country is regulated by Forward Markets commission (FMC)

Wholesale Market

The wholesale market in India, an important component of the

India commodity market, traditionally dealt with framers and

manufacturers of goods. However, in the present scenario,

their roles have changed to a large extent due to the enormous

growth that the economy has witnessed. The lengthy process of

wholesalers buying from manufacturers; then selling it to

retailers who in turn sold it to consumers does not seem

feasible today. An improvement in the transport facility has

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made the interaction between the retailer and manufacturer

easier; the need for a wholesale market is gradually

diminishing.

Retail Market

The retail market in India is currently witnessing a boom. The

growth in the India commodity market is largely attributed to

this boom in the retail market. Policy reforms and liberal

government policies have ensured that this sector is growing at

a good pace. Some of the reasons attributed to the growth of

retail sector in India include the large population of the country

who has an increased purchasing power in their hand. Another

factor is the heavy inflow of foreign direct investment in this

sector. More than 80% of the retail industry in the country is

concentrated in large cities.

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INDIAN COMMODITYEXCHANGES:

There are more than 20 recognized commodity futures

exchanges in India under the purview of the Forward MarketsCommission (FMC). Commodity futures exchanges are divided

majorly into two categories:

oNational exchanges

oRegional exchanges

Th

e four exch

anges operating at th

e national level

oNational Commodity and Derivatives Exchange ofIndia

Ltd. (NCDEX)

oNational Multi Commodity Exchange ofIndia Ltd. (NMCE)

oMulti Commodity Exchange ofIndia Ltd. (MCX)

o Indian Commodity Exchange Ltd. (ICEX)

There are more than 15 regional commodity exchanges in

India.

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WHATISICEX???

INDIAN COMMODITY EXCHANGE LIMITED (ICEX) is a screen

based on-line derivatives exchange for commodities and has

established a reliable, time tested, and a transparent trading

platform. It is also in the process of putting in place robust

assaying and warehousing facilities in order to facilitate

deliveries. It is jointly promoted by Indiabulls Financial Services

Ltd and MMTC Limited, and other partners- Indian Potash Ltd.,

KRIBHCO and IDFC.

This exchange is ideally positioned to tap the huge scope for

increasing the depth and size of commodities' market and fill inthe structural gaps existing in the Indian market. Our head

office is located in North India (Gurgaon), one of the key

regions in India's Agri belt, with a vision to encourage

participation of farmers, traders and actual users to hedge their

positions against the wild price fluctuations.

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Corporate vision:

Provide fair, transparent and efficient trading platform to all

participants

Meet the international benchmarks for the Indian

commodity market

Provide equal opportunity and access to investors all over

the country through the modern communication modes

Attract a wide array of end users, financial

intermediaries and hedgers

Become a major trading hub for most of the

commodities

To provide product portfolio to suit the trading

community needs in an efficient manners

Provide the widest range of benchmark future products

available on any exchange, overing all major commodities. Our

collective vision is global growth, innovative product

development, continually enhanced echnology and the highest

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level of service available on any exchange. We offer future

trading in Agricultural commodities, bullions, base metals, and

energy.

To serve customers with a global product line,

virtuallyround-the-clock electronic trading and strategic

alliances with other leading players. We also offer a

number of programs and products designed specifically to

appeal to a global audience.

Key differentiators:

y Joint venture between Public/Private entities Well capitalized

Rs. 100 Cr initial capital Reputation of partners and pan India

presence

y Key stake holders having rich experience in the domain viz.

commodities, warehousing, financial markets

y Professionally driven exchange with an entrepreneurial

mindset

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y Aim to remove discrepancy in the commodities market by

building transparency in the exchange

y Unprecedented price transparency and market depth

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SHAREHOLDERS & SHAREHOLDING PATTERN:

` Reliance Exchange next Ltd (RNext):

a wholly owned subsidiary of Reliance Capital, represents Reliance

entry into Exchange vertical. RNext aims to be present across asset

classes in the Exchange space.

Reliance Spot Exchange (RSX) is the first such initiative from RNext. RSX

focus on creating a unique value added proposition in the existing spot

market. RSX aims to bring together the regional spot markets on a

national level, through a single electronic marketplace for physical

delivery through e-auction in agricultural and other commodities.

RSX offers additional services such as Quality assaying, testing, grading,

warehousing, collateral management, financing, to bring about

transparency, efficiency, modern technology and integrated solution to

the market participants

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MMTC Ltd:

a Government of India enterprise, is the largest international trading

company ofIndia having annual turnover of more than US$ 7Billion or

Rs. 36000 Crore. It is among the leading international trading company

of South Asia having experience of more than 45 years in bulk trading of

diverse commodities and products.

It is present in 56 locations in India through offices, warehouses, port

offices & retail outlets. It is the largest exporter ofMinerals and single

largest importer/supplier or Bullion & Non-Ferrous Metals in India.

MMTC is also leading in trading of Agro products Fertilizers, Coal &

Hydrocarbons textiles, chemicals etc.

MMTC Ltd has a fully owned subsidiary, MTPL in Singapore and also a

promoter ofNINL in Orissa, an Iron & Steel plant MMTC Limited, and

Indias first Super Star Trading House, continues to be the

country's leader in mineral exports for four decades now. During

the last decade, MMTC could withstand the stiff competition in the

world market by its continuous and persistent efforts in diversifying its

markets, enlarging its product range, expanding extensively its

infrastructure facilities and expertise in mineral operations, and by

attaching utmost care and importance to its trade commitments as also

the quality of service and products.

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MMTC has provided further fillip to value addition to minerals. The 1.1

million ton Steel Plant consumes about 2 million tons of various types

of minerals annually being supplied by MMTC. The company has also

taken an initiative to link import of capital equipments required for

modernizing mining activities in the country to promote export of

minerals. The import of the earthmoving equipments was linked to

export ofIron Ore under EPCG scheme.

Items of trade

IRON ORE

MANGANESE ORE

CHROME ORE

OTHERS

(Mud Chemicals, Barytes, Bentonite, Bauxite, Talc, Gypsum,

Feldspar,

Quartz/Silica Sand, Garnet Sand, Kaolin (China Clay),

Vermiculite)

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Destination of exports

MMTC exports Iron ore to Japan, South Korea, China, Middle East etc.

The export is both on the basis of long term and annual spot contracts.

Leader in mineral exports

MMTC's performance in mineral trade has been acknowledged by the

CAPEXIL (Chemicals and Allied Products Export Promotion Council) by

conferring the nation's highest award for excellence in mineral

exports 13th time in succession.

Mode of sales

MMTC's mineral sales are on FOB basis only.

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` Indiabulls Financial Services Limited:

is part ofIndiabulls Group, one of the top business houses in the country with

business interests in Real Estate, Infrastructure, Financial Services, Retail,Multiplex and Power sectors. Indiabulls Financial Services is one of India's

leading and fastest growing private sector financial services companies.

Indiabulls Financial Services is an integrated financial services powerhouse

providing Consumer Finance, Housing Finance, Commercial Loans, Life

Insurance, Asset Management and Advisory services. The company is focused

on providing multiple financial services through an extensive network of

customer touch-points covering tier I, tier II and tier III cities. Indiabulls serves

more than 500,000 customers across different financial products through its

branch network, call centers and the Internet. It also ranks among the top

private sector financial services and banking groups, in terms of net worth.

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` Indian Potash Ltd:

the biggest canalizing agency (State Trading Enterprise) for import ofUrea and

other fertilizers on behalf of Government of India, is a major player in Indian

Fertilizer Industry with offices and dealers network across the country. Thisnetwork is serviced by a huge chain of Warehouses (total capacity 8 lakhs MT)

spread across the country.

Shareholder Shareholding Pattern

Reliance Exchangenext Ltd. 26%MMTC Limited 26%

Indiabulls Financial Services Limited 14%

Indian Potash Limited 10%

KRIBHCO 5%

IDFC 5%

Others 14%

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SWOTANALYSIS:

Strengths:

y Well established Brand Name

y Pan India reach through established equity terminals

y First Public Private commodity exchange

y Efficient delivery mechanism through accredited

warehouses

y Collaboration with BBA biggest bullion association

Weakness:

y Late arrival in the market

y Staff not well trained

y Spread is not narrow

y No proper marketing strategies

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Opportunities:

y Vast potential in market

y More product in product portfolio

y In future players like mutual funds can invest in

commodity market

y In future they can be their own clearing house

Threats:

y Big Players like MCX and NCDEX are major threat

y Macro environment factor

y Upcoming exchanges are another threat to the security of

ICEX.

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RECOMMENDATIONS:

After a long journey with ICEX certain recommendations that

can help them generate some business are as follows:-

y They can be their own clearing house: - Since ICEX has a

tie up with GLOBE they are not able to generate more

business from their customers and also they cant give

their customers a benefit over clearing and settlement.

Hence they can have their in-house clearing house.

y They can add more products in portfolio: - The product

portfolio ofICEX is very small and is focused mainly on

gold. Hence the customer base ofICEX is very small. Sothey should try to increase their products.

y More focused marketing strategies: -ICEX can work upon

its marketing strategies to increase the customer base and

increase volumes over trade. Their marketing strategies

can include:

Free memberships

Large discounts on trading on special days.

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Privileges to customers who trade on ICEX over a

specific amount of volumes.

y Add more associations like BBA to their cliental: - Since

there is only one association in their cliental that is

generating business for ICEX so it should try to capture

more of such organizations that can help it generate more

business. One such step was the MARCOMM PROJECT

initiated by ICEX to generate awareness about ICEX and

commodity trading in other jewellery associations in

Mumbai.

y Proper training to staff to handle financial queries should

be given: -More staff training is necessary for improving

efficiency of the business. Generally the sales people are

not completely aware about the terms and conditions of

the business and so they create a wrong impression about

the company in the minds of consume

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WEBSITE COMPARISON

Parameters MCX NCDEX NMC ICEX Comments

Appearance

Positioning Scattered Appropriate Ideal average

Compact No Yes Yes No

Design Lacklusture Ok Good Ok

center

picture

Dull Good Best good NMCE

picture

animated s

good

color theme Dull Ok Ok good ICEX goin

with

Indiabulls

Charts Stagnant Responsive Responsive no

chart

Language

options in

other

Yes No No No Hindi an

Gujarati

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languages option

MCX

user friendly

language

Yes Yes Yes Yes

Informative

Updates Ok Better Best ok

top gainers

and losers

No Yes No yes

Offers Attractive No Yes no

Parameters MCX NCDEX NMCE ICEX Comments

membership

details

Attractive Organized Both No phone

numbers

MCX

Feedback Yes Yes Yes No

enquiry

details

No No Yes No

News No Yes Yes No

Quotes No No Yes No NMCE

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provides

quotes of a

commoditi

member

account

No No yes No specific are

for membe

trade

calendar

No No yes No

member

calendar

No Yes no No

Partners Yes Yes yes Yes good

utilization

space b

NMCE b

not ICEX

knowledge

hub

Yes Yes yes Yes best

NMCE, ICE

provides

user manua

OTHERS

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trading

portal

No No yes No live mark

in differe

languages,

interactive

general

enquiry

No No yes No

searchengine No No yes No

Parameters MCX NCDEX NMCE ICEX Comments

online

membership

No No yes No

Parameters MCX NCDEX NMCE ICEX Comments

mobile feeds Yes No yes No

rss feeds No No yes No

Animations Offers None everything

best

No

LACUNAS scattered

information

lack of

animation

losers and

gainers

space wasted o

partners

user lack of repetitive tabs

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friendly to

a limit

offers

stagnant chart less information

USP mobile

feeds

Charts live market colour

theme

language

option

compact

design

animation picture

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OBSERVATIONS:

After comparing the websites of different commodity

exchanges the observations are:

1)As far as websites appearance is concerned NMCE and

ICEX are far ahead of other two exchanges.

2)Coming to language options MCX website is available in

two most important languages that is GUJARATI and HINDI

in which most of the commodity trading is done.

3)Coming to the information pattern, NMCE has the

maximum information available on its website including

price quotes of all the commodities and also the

membership details.4)NMCE also makes perfect use of space and shows price

feeds in different languages. Also its website has complete

user manual.

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RECOMMENDATIONS:

The comparison of different websites has led to the following

recommendations:

1)ICEX should come up with different language options so

that people can easily communicate with the website and

also the level of complications reduces to a larger extent.

2)ICEX should also include charts and graphs for different

parameters so that the traders work becomes rather

simple.

3)They can also come up with live market price feeds and

situations to make the website more interactive.

4)The company should also attach testimonials of varioustraders that are presently trading through ICEX portal

which gives a good impression about the company.

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ICEX SCOPE.

Of all the people trading online only 16% people trade

through ICEX.

This shows that ICEX has a lot of potential to grow and to

increase its customer base.

However for this ICEX has to implement aggressive

marketing strategies like compensation schemes for

traders who trade in larger volumes. Also setting certain days free for trading on the exchange

will help in increasing the customer base.

The people trading in commodities online have very less

knowledge about ICEX.

Also the people who are trading on ICEX has just one thing

in favour of it is that it has very less transaction cost.

For this the company should try to make more attempts to

increase its USPs.

They should try to make more attempts to make people

aware about their less transaction cost and other value

added services like cheaper memberships and also free set

up of its software.

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ICEX has not been able to provide sufficient information to

its customers.

To face this challenge they should try to make more

advertisements in different media and try to ake more

awareness campaigns.

Most of the people said that they are not at all satisfied

with their services since ICEX has not been able to settle

disputes between their members.

For this ICEX should make more stringent laws to avoid

such problems in the future.

The survey also showed that MCX is the most

accountable organization in case of any kind of

disputes.

For this ICEX should study as how MCX handles its

operations if there is any kind of settlement

disputes.

ICEX should also try to enforce stringent laws to

avoid any kind of Disputes among the parties.

This will not only help ICEX to retain its customersbut also to capture new customers that had some

issues with other exchanges

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BIBLIOGRAPHY:

y www.ncdex.com

y www.icexindia.com

y www.mcxindia.com

y Investopedia.com

y Scribd.com

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Indian Commodities Exchange Limited [ICEX]

Location Gurgaon , Started in November 2009

It is jointly promoted by Indiabulls Financial Services Ltd and

MMTC Limited. Other partners- Indian Potash Ltd., KRIBHCO and

IDFC

ICEX is India's third commodity exchange and offers contracts

primarily in metals and energy

Its current average daily turnover is Rs.15-20 billion as against

200 billion for MCX and 35 billion for NCDEX

ICEX PRODUCTS:

Precious metals: Gold, Silver

Metals: Copper, Lead

Energy: Crude oil, Natural gas

Oils& Oilseed complex: Mustard seed, Soyabean, Soyaoil

Fibers: Raw jute

Other Agro products: Mentha oil, Minerals ,Iron ore

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TABLE OF CONTENTS

SR.NO. TOPIC

1 WHAT IS COMMODITIES MARKET

2 INTRO TO INDIAN COMMODITY MARKET

3 INDIAN COMMODITY EXCHANGES

4 ICEX INTROUCTION

5 SHAREHOLDERS OF ICEX

6 SWOT ANALYSIS

7 RECOMMENDATIONS (SWOT)

8 WEBSITE COMPARISON9 OBSERVATIONS(COMPARISON)

10 RECOMMENDATIONS(COMPARISON)

11 ICEX SCOPE

12 BIBLOGRAPHY

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