Muzaffarpur (Bihar), June 24, 2015: In view of the hedging needs of the market participants based in and around Muzaffarpur, Multi Commodity Exchange of India Ltd (MCX), Forward Markets Commission (FMC), and North Bihar Chamber of Commerce and Industry jointly organized an awareness programme on commodity futures markets on June 24, 2015.
During the programme, the experts from MCX spoke on various aspects of commodities trading in India. They explained about the functioning of Commodity Exchanges, the benefits of commodity futures for trading, and price risk management. Furthermore, they mentioned that such programmes encourage more and more participants to benefit from the price discovery and price risk management functions performed by the commodity exchanges.
While explaining about the importance of price risk management, Mr. Vibhor Tandon, Assistant Vice President-Business Development, MCX said, “The fast changing global economic situation has resulted in a high volatility in prices of commodities. Hence, it is pertinent for commodity stakeholders to guard against price risks by participating in exchange-traded futures contracts.”
“The futures contracts offered by MCX in basemetals, bullion and energy segments are traded in Indian Rupee, hence the currency risk is mitigated while hedging on the Exchange platform. Therefore, the commodity value chain participants trading in the international commodities will be able to use the trading platform for effective price risk management”, he further added.
Mr. Motilal Chhaparia, President, North Bihar Chamber of Commerce and Industry said, “To benefit the most from the price risk management tools offered by the commodity exchanges, it was important to understand the objective behind it. The experts from MCX did a great job in explaining in detail about hedging and how it can benefit the market participants in safe guarding their price risks, especially in the current scenario when the volatility in the commodity prices is on an upward trend.”
This session gave the market participants an opportunity to understand the importance and benefits of price risk management. The experts highlighted about the wide-ranged futures contracts offered by the commodity exchanges, of different lot sizes to suit the requirements of the SMEs and other market participants.