Every commodity has unique supply chain, market dynamics: MCX CEO
Mumbai, Aug 13
The Global Commodity Conclave is an important platform because every commodity has its own supply chain, market structure, and risk factors, making industry-wide discussions essential for market development, MCX MD & CEO Praveena Rai said on Thursday.
Speaking at the event here, Rai said the conclave provided a unique platform for stakeholders across commodity value chains to exchange ideas and address emerging challenges.
"This conclave is very important because there are financial participants on one side and you see each and every commodity. Suppose crude oil and natural gas or gold and silver, copper, aluminum, zinc or cardamom, each commodity is a separate supply chain," she said.
Rai noted that every commodity functions within a distinct ecosystem, with differences in production, imports, refining, inventory management, industrial demand, and exposure to market volatility.
She said global economic conditions and geopolitical developments also affect commodities differently, underscoring the need for focused discussions among market participants.
"Their production, import, refining, inventory management, industry, and what is the volatility of the commodity, what is the impact of the global environment, what is the impact of the geopolitical environment, each commodity is different. I think all the participants are here including international participation, so we are very happy and I think very good conversations are there," she told IANS.
According to Rai, the conclave witnessed participation from both domestic and international stakeholders, enabling conversations on a broad range of commodities, including crude oil, natural gas, gold, silver, copper, aluminium, zinc, and agricultural products.
She said such interactions are important for improving market understanding and strengthening India's commodities landscape.
The event also featured discussions on the future of electricity derivatives in India. Arun Goyal, former member of the Central Electricity Regulatory Commission (CERC), said the session brought together experienced industry professionals who shared recommendations for deepening the country's electricity derivatives market.
Goyal, who moderated a panel on electricity derivatives, said India's market in this segment remains relatively underdeveloped compared to global benchmarks.
He stressed the need for greater market depth and participation to support the evolving power sector and improve risk-management tools for stakeholders.
— IANS
Reader Comments
The point about electricity derivatives is particularly important for India. We are transitioning to renewable energy, and with that comes volatility. If we don't develop a robust derivatives market for power, our power producers and distributors will be at the mercy of price fluctuations. Good to see CERC veterans like Arun Goyal engaging in this dialogue. 🙌
As someone who trades in commodity futures, I totally agree with Ms. Rai. Whether it's MCX gold or crude, the supply chain dynamics are totally different. However, I wish the conclave focused more on the retail investor perspective. Many small traders like us are still trying to understand how these market structures affect our daily trades. Hope the next edition has more retail-focused sessions!
Very insightful. I remember last year when cumin prices spiked due to export restrictions from our trading partners, while silver was falling because of global interest rate hikes. Exactly proves her point that each commodity is a different ballgame. The Indian market needs more platforms like this to help farmers and producers hedge their risks effectively. 🇮🇳
Respectful but critical view: While these conclaves are good for networking, the real issue in India is the regulatory framework. We talk about international participation and best practices, but our commodity markets still face liquidity issues and speculative attacks. The conversation should go beyond the surface and address how we can deepen participation from physical market participants like farmers and small traders, not just financial players.
The electricity derivatives focus is a welcome development. With RPOs and increasing renewable penetration, power prices are becoming more volatile. In a country like
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.