In India, traded commodities encompass a wide range of goods that are bought and sold on commodity exchanges such as Multi Commodity Exchange (MCX) and National Commodity and Derivatives Exchange (NCDEX). These commodities can be broadly categorized into various types based on their nature, usage, and market demand. Here are the main types of traded commodities in India :
1. Precious Metals:
- Gold: Considered a store of value and a hedge against inflation. Traded in various forms such as gold bars, coins, and futures contracts.
- Example: Gold futures contracts traded on MCX.
- Silver: Used in industrial applications, jewelry, and investment purposes.
- Example: Silver futures contracts traded on MCX.
2. Base Metals:
- Copper: Essential for electrical wiring, construction, and industrial machinery.
- Example: Copper futures contracts traded on MCX.
- Aluminum: Widely used in transportation, packaging, and construction sectors.
- Example: Aluminum futures contracts traded on MCX.
3. Energy:
- Crude Oil: Crucial for fueling vehicles, industries, and as a feedstock for petrochemicals.
- Example: Crude oil futures contracts traded on MCX.
- Natural Gas: Used for heating, electricity generation, and as a raw material in industrial processes.
- Example: Natural gas futures contracts traded on MCX.
4. Agricultural Commodities:
- Cereals: Includes staple grains such as wheat, rice, and maize.
- Example: Wheat futures contracts traded on NCDEX.
- Pulses: Leguminous crops like chickpeas, lentils, and beans.
- Example: Chana (chickpea) futures contracts traded on NCDEX.
- Edible Oils: Essential cooking oils like soybean oil, palm oil, and mustard oil.
- Example: Soybean oil futures contracts traded on NCDEX.
- Spices: Aromatic substances such as pepper, cardamom, and turmeric.
- Example: Pepper futures contracts traded on NCDEX.
5. Soft Commodities:
- Cotton: Used in textile manufacturing.
- Example: Cotton futures contracts traded on MCX.
- Sugar: Key ingredient in food and beverage production.
- Example: Sugar futures contracts traded on NCDEX.
6. Others:
- Bullion: Includes both gold and silver as precious metals.
- Example: Combined futures contracts for gold and silver traded on MCX.
- Agro-based Commodities: Products derived from agricultural produce such as guar gum, mentha oil, etc.
- Example: Guar seed futures contracts traded on NCDEX.
Trading Platforms:
- Multi Commodity Exchange (MCX): Offers trading in metals, energy, and agricultural commodities.
- National Commodity and Derivatives Exchange (NCDEX): Focuses on agricultural commodities and some metals.
These commodities play a crucial role in India's economy by facilitating price discovery, hedging against price volatility, and providing investment opportunities for traders, investors, and stakeholders across various sectors. Trading in commodities involves understanding market dynamics, global demand-supply factors, weather conditions, and government policies impacting agricultural commodities.