Commodity Awareness Programme on the Need and Importance of Hedging

In a bid to create awareness on the need and importance of Hedging among the commodity stakeholders, Multi Commodity Exchange of India Ltd. (MCX) and Forward Markets Commission (FMC) organized an awareness programme in association with Central Bihar Chamber of Commerce, Gaya on April 10, 2015 at Gaya, Bihar.

The purpose of the platform was to create an understanding of the commodity futures market among the participants, which would enable them to manage their price risks better. The experts from MCX explained about the technicalities of working of the commodity markets with respect to the products, price discovery, transparency and risk management mechanism in trading and settlement of transactions. Additionally, they highlighted the role of FMC in regulating and monitoring the functions of commodity exchanges in building confidence of the market participants, and for the growth of Commodities Market in India.

Mr. Vibhor Tandon, Assistant Vice President-Business Development, MCX said, “Besides helping in efficient price discovery, commodity exchanges such as MCX also provides the commodity value chain participant with an effective risk management platform to manage their price risks. Further, in order to meet the hedging demands of various value chain participants, MCX offers different variants of futures contracts in bullion, base metals, energy, and agri segment.

Mr. Hari Prasad Kejriwal, President, Central Bihar Chamber of Commerce, Gaya said, “Commodity price risk management assumes great importance for the commodity value chain participants, in view of the ongoing uncertainty and volatility in commodity prices, which is the outcome of factors such as, demand and supply fundamentals, geopolitical risks etc. Thus, I would urge all the market participants to avail of the effective hedging mechanism offered by commodity exchanges such as MCX, to protect themselves from adverse price movements.”