If volumes are anything to go by, commodity futures trading is here to stay.
Silencing all rumours and speculations on its future, the total commodity futures trading volume in the last financial year showed an increase of 70 per cent to Rs 37 lakh crore (Rs 37 trillion). The previous year it was Rs 21.55 lakh crore (Rs 21.55 trillion).
The driving force behind this jump was volumes from metal and energy contracts. According to official sources, MCX registered volumes of approximately Rs 22.93 lakh crore (Rs 22.93 trillion) with metals and energy accounting for close to 93% of for current fiscal. It is a leap of 138% over the previous year turnover of Rs 9.6 lakh crore (Rs 9.6 trillion).
As against this combined futures volumes at BSE and NSE rose 49% to Rs 64.17 lakh crore (Rs 64.17 trillion) in fiscal 2007. The futures turnover in fiscal 2006 was Rs 43.5 lakh crore (Rs 43.5 trillion).
Metals -- gold, silver, copper, crude oil, zinc, natural gas and nickel -- contributed Rs 21.35 lakh crore (Rs 21.35 trillion) towards this.
According to market analysts, uncertainty over the agriculture commodities following government interventions which hit volumes of NCDEX, may have diverted the trade to other commodities like metal and crude.
In an effort to curb inflation, the Central government had banned futures trading in several agricultural commodities during the last fiscal.
NCDEX volumes showed a growth of 7% at Rs 11.67 lakh crore (Rs 11.67 trillion) during fiscal 2007 as against volume of Rs 10.91 lakh crore (Rs 10.91 trillion) during 2005-06.
Agriculture commodities are the main driver of volumes at the exchange and since agriculture production and pricing had gone through an upheaval last year it has also affected the volumes, said an NCDEX official.
NMCE with increased network to new areas however showed a phenomenal growth in turnover volumes of over 196% at Rs 1.12 lakh crore (Rs 1.12 trillion) from Rs 38,058 crore (Rs 380.58 billion) last year.
The average daily turnover stood at Rs 367 crore (Rs 3.67 billion). On account of spreading network to the north and east NMCE has been able to generate such volumes and also bringing in corporates to the trading platform, an NMCE MD official said.
The most actively traded commodities at the exchange was pepper, generating annual volume of Rs 12,462 crore (Rs 124.62 billion) followed by rubber with a volume of Rs 7,428 crore (Rs 74.28 billion), raw jute Rs 1,307 crore (Rs 13.07 billion) and cardamom Rs 637 crore (Rs 6.37 billion). Close to 95% of the total commodity traded volumes are currently generated from MCX and NCDEX with NMCE and other regional exchanges accounting for the rest of it.