Commodity exchanges turnover declines 11% on shift to riskier assets

Data by the Forward Markets Commission, showed national commodity futures exchanges had a turnover of Rs 6,17,814 crore between May 1 and May 15

Commodity exchanges' (commexes') turnover declined over 11 per cent in the first fortnight of May due to range-bound movement of commodity prices in both agri and non-agri sectors.

The levy of the commodity transaction tax (CTT) and traders' growing interest in riskier assets like equity market effected the decline.

Data by the commodity derivatives markets regulator, the Forward Markets Commission (FMC), showed all national-level commodity futures exchanges had generated a turnover of Rs 6,17,813.80 crore between May 1 and May 15 this year compared to Rs 6,96,610.72 crore in the corresponding period last year.

The cumulative value of trade between April 1 and May 15 this year, however, recorded a growth of over 13 per cent to Rs 20,95,117.67 crore this year from Rs 18,49,082.55 crore in the comparable period last year.

"With traders' interest growing in riskier assets like equities, business in commodities has gradually started slowing. Also, bearish sentiment in most commodities, with a range-bound price movement in gold and silver, added to weak sentiment," said Naveen Mathur, associate director, Angel Broking.

The Multi Commodity Exchange (MCX) continued its leadership and edged higher in business with over 90 per cent market share, followed by the National Commodity & Derivatives Exchange (NCDEX), less than six per cent.

MCX clocked a turnover of Rs 5,61,009.41 crore and NCDEX Rs 37,016 crore during the first fortnight of May.

National exchanges contribute over 99 per cent to overall commodity futures trading business.