Programme on Hedging and its Benefits Organised at Bhavnagar

With an aim to help the market participants learn and understand about the fundamental of commodity futures market, and benefits of the price risk management tools, Multi Commodity Exchange of India Ltd (MCX) and Forward Markets Commission (FMC) organised an awareness programme in association with Bhavnagar Metal Merchant Association at Bhavnagar, Gujarat on June 13, 2015.  It was tailored especially for the members of the association, including local base metal value chain participants in and around Bhavnagar.

The experts at the seminar, explained in detail about risk management and price discovery, the two fundamental and critical functions performed by the commodity exchanges. Further, 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.

While elaborating about the mini futures contracts offered by MCX, especially in the base metals segment viz. copper, nickel, aluminium, zinc and lead, Mr. Ayub Malek, Senior Manager-Business Development, MCX said “These innovative contracts have been able to cater to a wide range of base metal value chain participants, including SMEs and physical market players. This has enabled a large number of small stakeholders exposed to commodity price volatility – and who were hitherto not able to do so due to large lot sizes – to manage their risks.

“The Exchange offers rupee-denominated futures contracts in base metals which are benchmarked to international prices. This has enabled the base metal value chain participants to use the trading platform for effective risk management in international commodities, without having to hedge in global exchanges or against currency risks,” he added.

Mr. Hanif Bhai Chauhan, President, Bhavnagar Metal Merchant Association said, “MCX is doing an excellent job by organising these educational programmes across India, including in the tier II and tier III thereby providing an efficient tool to the commodity value chain participants for managing their price risks and planning their future economic activities.”

“We are more than pleased to be associated with MCX and FMC in organising this programme as it is necessary to create awareness amongst market participants on the need to hedge their price exposures. We would be happy to collaborate with MCX in organizing more such awareness programmes in the future as well”, he further added.