Project on Challenges to Commodity Markets in India

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Acknowledgment

A project is never the sole product of a person whose name has appeared on the cover. Even the best effort may not prove successful without proper guidance. For a best project one needs proper time, energy, efforts, patience, and knowledge and how to use all these things. But without any guidance it remains unsuccessful. I have done this project with the best of my ability and hope that it will serve its purpose.

At the onset I would like to express my deepest gratitude to Mr.Sushil Sinha, Country Head, Karvy Comtrade Ltd. for giving me the opportunity of conducting out my summer internship project in Karvy Comtrade Ltd.

It was really a great learning experience and I would really express my special and profound gratitude to my guide Ms. Priya Chaudhary who not only helped me in the successful completion of this report but also spread his precious and valuable time in expanding my knowledge base, I take immense pleasure in thanking them for supporting at all stages of this project. After the completion of this Project I feel myself as a well aware person about the procedure and the complexities that can arose during the process. Also I get an insight of the commodity markets and its working. Finally, I am also grateful to all those personalities who have helped me directly or indirectly in bringing up this project report, my colleagues.

- Abha Mahapatra

Mr. Sushil Sinha

VP & Country Head
Karvy Comtrade Ltd.

Certificate

This is to certify that the project report entitled “Challenges to Commodity Markets in India” prepared by Ms. Abha Mahapatra (Roll no. 75003),student at Shaheed Sukhdev College of Business Studies, Delhi University, in fulfillment of summer internship project at Karvy Comtrade Ltd., Hyderabad, Andhra Pradesh is a record of work done under my guidance and supervision.She has successfully completed her summer internship project of one and half months starting from 28 May 2012 to 8 July 2012. As an intern she has successfully completed all assigned task during the period of internship. An overview of tasks : • Worked in a software driven trading environment.

• Dishcharged customer relation management functions.

Banjara Hills, Hyderabad (Mr. Sushil Sinha) Andhra Pradesh Supervisor 8th July 2012

Executive Summary
Commodity exchanges in Indian are still at a nascent stage, and there are numerous bottlenecks in the growth of the commodity futures market. The challenges facing the Indian Commodity markets are very serious in nature and cannot be ignored as they can paralyze the agricultural futures markets, much against the objective of agricultural liberalization. The main problem is that the commodity markets are under the control of Government.

Commodity derivatives have achieved one of the fastest growth rates, probably the highest among any other developmental initiatives undertaken either in agricultural sector or in financial sector of a developing economy like India. But certainly this achievement is not just erecting a castle in air. Reasons are deep-rooted. Indian traders have century old experiences in trading commodity derivatives. Permitting commodity exchanges to set up an anonymous electronic trading platform accessible across the nation has given all the required mileage for commodity trading to scalenew heights. 

Compared to the 130 years old stock market, the commodity market is in its nascent stage. It is very much in consensus that by the advent of commodity derivatives trading, a silent revolution is building up in the economy. Though trading volumes in this new market is gradually catching up that in the stock market, yet commodity exchanges are facing challenges...
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