Programme jointly organised by MCX and Bullion Associations in Gujarat
Multi Commodity Exchange of India Ltd (MCX), conducted awareness programmes on commodity futures market in Gujarat. These educational programmes organized in association with Shree Choksi Mahajan Mandal at Padra on September 28, 2015, and Shreemali Soni Gnati Panch at Halol on September 29, 2015 focused on the benefits of Hedging bullion price exposures.
During the programmes, the experts from MCX apprised the large gathering of association members in detail about the commodity futures market in India, it also served to explain in detail all the technicalities associated with the working of a commodity exchange— with respect to the products, price discovery, transparency and risk management mechanism in trading and settlement of transactions.
In the later sessions, they, through a detailed presentation explained the concept of Hedging and its benefits to the market participants. Since the volatility in the commodity prices virtually affects one and all, risk management assumes great significance and importance. Especially in the current scenario when the economic uncertainty is on an upward trend, hedging is one such financial instrument that can immensely help the commodity value chain participants in managing their price risks
While explaining about the benefits of smaller denomination contracts or mini contracts, as popularly known, Mr. Ayub Malek, Senior Manager-Business Development, MCX said, "MCX’s mini contracts are an absolute value proposition to the smaller bullion players including SME and small jewelers, since these contracts offer flexibility by facilitating gradual build-up and/or scaling down of hedge positions, better cash flow management and better risk sizing.”
Mr. Choksi Sudhirkumar Sureshchandra, President-in-Charge, Shree Choksi Mahajan Mandal, Padra said, “Indian commodity exchanges including MCX, have come a long way with an impressive growth in the last few years. Moreover, as they grew, they also took along with them the stakeholders, besides nurturing the ecosystem delivering both the felt and unfelt benefits of their existence to one and all in the commodities supply chain.”
“I would like to add that through these programmes MCX is empowering the market participants to manage their price risks in a more efficient manner. We would be more than happy to associate with MCX for many such programmes in the near future, thus promoting financial literacy”, he further stated.
Mr. Choksi Jayantilal Ramanlal, President, Shreemali Soni Gnati Panch, Halol said, “There is a need to create a deep, liquid and viable commodity futures market, and this can be only made possible by bringing in more participants under the beneficial ambit of commodity futures market.”