With an intent to create awareness among SMEs about commodity futures market and educate them about price risk management tools and benefits of hedging, Multi Commodity Exchange of India Ltd (MCX), Forward Markets Commission (FMC), and National Small Industries Corporation (NSIC), jointly organised an interactive awareness session at Kolkata on Feb 3rd.
This comprehensive seminar gave the participants an overview about the commodity futures market, benefits of hedging, importance and need for risk management measures, role of commodity futures exchanges, and the regulatory perspective.
The speakers explained to the market participants about the benefits and advantages of trading on a regulated commodity exchange platforms such as higher liquidity, transparent pricing, central clearing, robust risk management and surveillance system. The experts further elaborated about the base metal contracts offered by the Exchange, which enable the hedgers to effectively manage the impact of price fluctuations and control their risks efficiently.
Ms. Rashmi Nihalani, Assistant Vice President-PKMT, MCX said, “It offers efficient base metals futures trading platform that can be used by the base metal value chain participants to manage their risks. Further, while base metal futures traded on the Exchange platform have a high correlation with the international prices, the contracts are traded in Indian rupee. Hence, the currency risk is naturally mitigated while hedging on MCX."
Mr. Vibhor Tandon, Assistant Vice President- Business Development, MCX said, “It has been a delightful session with participants from NSIC. We are committed to spreading awareness and educating the market participants about the benefits such as price risk management and price discovery, the commodity futures market offers, and these initiatives are in line with our focus. Such enthusiastic participation motivates us to carry our drive further and involve multiple stakeholders in our conversation.”
Thanking both FMC and MCX for organizing the Interactive Session for its members and other participants, Mr.M. L. Das, Deputy General Manager, NSIC said, “The programme brought an insight into the technicalities of working of the commodity markets with respect to products, price discovery, transparency and risk management mechanism in trading and settlement of transactions. It also highlighted the role of FMC in regulating and monitoring the functions of commodity exchanges in building confidence of the commodity value chain participants and for the growth of Commodities Market in India,”
“Looking at the volatility in commodity prices, SMEs confronted with increasing and persistent uncertainty in raw material prices need to recognize the criticality of commodity price risk management as an essential part of their business operations”, he further added.
The programme saw a strong participation from the members NSIC and the queries put forward by them were effectively answered by the experts.
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