Definition of 'Commodities Market':

A physical or virtual marketplace for buying, selling and trading raw 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 on commodities-related companies. The most direct way of investing in commodities is by buying into a futures contract.

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:

y y y y

Multi Commodity Exchange (MCX) National Commodity and Derivatives Exchange (NCDEX) Indian Commodity Exchange (ICEX) 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

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.

INDIAN COMMODITY EXCHANGES:

There are more than 20 recognized commodity futures exchanges in India under the purview of the Forward Markets Commission (FMC). Commodity futures exchanges are divided majorly into two categories: o National exchanges o Regional exchanges The four exchanges operating at the national level o National Commodity and Derivatives Exchange of India Ltd. (NCDEX) o National Multi Commodity Exchange of India Ltd. (NMCE) o Multi Commodity Exchange of India Ltd. (MCX) o Indian Commodity Exchange Ltd. (ICEX) There are more than 15 regional commodity exchanges in India.

WHAT IS ICEX ???

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 in the 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.

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 commodities  To provide product portfolio to suit the trading a major trading hub for most of the

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

level of service available on any exchange. We offer future trading in Agricultural commodities, bullions, base metals, and energy.  To serve customers virtuallyround-the-clock alliances with other with a global product electronic trading and line,

strategic

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

y Aim to remove discrepancy in the commodities market by building transparency in the exchange y Unprecedented price transparency and market depth

SHAREHOLDERS & SHAREHOLDING PATTERN:

` Reliance Exchange next Ltd (R Next): a wholly owned subsidiary of Reliance Capital, represents Reliance entry into Exchange vertical. R Next aims to be present across asset classes in the Exchange space. Reliance Spot Exchange (RSX) is the first such initiative from R Next. 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

` MMTC Ltd:
a Government of India enterprise, is the largest international trading company of India 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 of Minerals 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 of NINL in Orissa, an Iron & Steel plant MMTC Limited, and India s 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.

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 of Iron Ore under EPCG scheme.

Items of trade  IRON ORE  MANGANESE ORE  CHROME ORE  OTHERS (Mud Chemicals, Barytes, Bentonite, Bauxite, Talc, Gypsum, Feldspar, Quartz/Silica Vermiculite) Sand, Garnet Sand, Kaolin (China Clay),

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.

` Indiabulls Financial Services Limited :

is part of Indiabulls 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.

` Indian Potash Ltd:

the biggest canalizing agency (State Trading Enterprise) for import of Urea 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. This network is serviced by a huge chain of Warehouses (total capacity 8 lakhs MT) spread across the country.

Shareholder Reliance Exchangenext Ltd. MMTC Limited Indiabulls Financial Services Limited Indian Potash Limited KRIBHCO IDFC Others

Shareholding Pattern 26% 26% 14% 10% 5% 5% 14%

SWOT ANALYSIS:
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

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.

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 can t 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 of ICEX is very small and is focused mainly on gold. Hence the customer base of ICEX is very small. So they 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.

 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

WEBSITE COMPARISON
Parameters Appearance Positioning Compact Design center picture Scattered No Appropriate Ideal Yes Yes Good Best average No Ok good NMCE picture animated so good color theme Dull Ok Ok good ICEX with Indiabulls Charts Stagnant Responsive Responsive no chart Language options other in Yes No No No Hindi Gujarati and going MCX NCDEX NMC ICEX Comments

Lacklusture Ok Dull Good

languages

option MCX

in

user friendly Yes language Informative Updates top Ok

Yes

Yes

Yes

Better Yes

Best No

ok yes

gainers No

and losers Offers Parameters Attractive MCX No NCDEX Organized Yes NMCE Both no ICEX No Comments phone numbers in MCX Feedback enquiry details News Quotes No No Yes No Yes Yes No No NMCE Yes No Yes No Yes Yes No No

membership Attractive details

provides quotes of all commodities member account trade calendar member calendar Partners Yes Yes yes Yes good utilization of space NMCE not ICEX knowledge hub Yes Yes yes Yes best in by but No Yes no No No No yes No No No yes No specific area for members

NMCE, ICEX provides user manual

OTHERS

trading portal

No

No

yes

No

live market in different languages, interactive

general enquiry

No

No

yes

No

searchengine No Parameters online membership Parameters MCX MCX No

No NCDEX No

yes NMCE yes

No ICEX No Comments

NCDEX No No None

NMCE yes yes

ICEX No No

Comments

mobile feeds Yes rss feeds Animations No Offers

everything No best

LACUNAS

scattered

lack

of losers and space gainers partners

wasted

on

information animation user lack of

repetitive tabs

friendly to offers a limit stagnant chart USP mobile feeds language option compact design animation Charts less information live market colour theme picture

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.

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 various traders that are presently trading through ICEX portal which gives a good impression about the company.

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 USP s.  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.

 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 customers but also to capture new customers that had some issues with other exchanges

BIBLIOGRAPHY:

y y y y y

www.ncdex.com www.icexindia.com www.mcxindia.com Investopedia.com Scribd.com

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

TABLE OF CONTENTS
SR.NO. 1 2 3 4 5 6 7 8 9 10 11 12 TOPIC WHAT IS COMMODITIES MARKET INTRO TO INDIAN COMMODITY MARKET INDIAN COMMODITY EXCHANGES ICEX INTROUCTION SHAREHOLDERS OF ICEX SWOT ANALYSIS RECOMMENDATIONS (SWOT) WEBSITE COMPARISON OBSERVATIONS(COMPARISON) RECOMMENDATIONS(COMPARISON) ICEX SCOPE BIBLOGRAPHY