BS-CPAI - Institutionalization & Linking of Commodity Spot & Derivatives Markets

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December 04, 2019 Last Updated at 15:11 IST

Seminar on 

Institutionalization and Linking of Commodity Spot and Derivatives Markets

BK SABHARWAL: PAST PRESIDENT, COMMODITY PARTICIPANTS ASSOCIATION OF INDIA (CPAI), VIJAY SARDANA: MEMBER CDAC AND SEBI, DINESH JOSHI: DGM SEBI, NRO, NARINDER WADHWA: PRESIDENT CPAI AND MD SKI CAPITAL SERVICES

Commodity Market participants need to bring trust into the commodity markets by effectively engaging with all stakeholders in the value chain be it farmers, used industry or traders in order to make a valuable contribution towards building a 5 trillion economy in India by 2025, Vijay Sardana, member of the Commodity Derivatives Advisory Committee (CDAC) and SEBI said.

Sardana was speaking as a Chief Guest in the Smart Business event of Business Standard on the topic of ‘Marching Towards Five Trillion Dollar Economy: Role of Commodity Markets’. The event was organised with the Commodity Participants Association of India (CPAI) on 25th November.

“The Commodity market players are sitting on a goldmine of opportunities, but aren’t able to milk it,” Sardana said. He said that commodity markets will remain a mere, ‘speculators club,’ unless user industries are brought on board and become equal partners in the market.

Sardana said, commodity markets, both spot and derivatives together will account for over $2.5 trillion of the envisaged $5 trillion economy by 2025.

Narinder Wadhwa, President of CPAI and MD, SKI Capital Services said that we need to integrate spot and future commodity markets to enable commodity markets to play a reasonable role in the economy.

Going forward, the Centre needs to bring down the transaction cost for trading in the commodity markets, which will also encourage other stakeholders to enter the markets.

B K Sabharwal, past president of CPAI in his address said that they are hopeful that integration of spot and futures commodity markets will gather steam in the right earnest as per the roadmap suggested by a high-powered panel led by NITI Aayog on the same.

Dinesh Joshi, DGM, SEBI said SEBI is keen to develop the commodities markets as they have done with the equities and bring the same processes that world-class equity markets contain. He said awareness is the key to bring trust into the commodity markets.

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