"Any contract takes at least 18-24 months to become successful. A good international benchmark is an options-to-futures ratio of 60 per cent," said Mrugank Paranjape, Managing Director and Chief Executive Officer, MCX, on the sidelines of the Commodities & Equities Outlook Weekend 2018’ in Mumbai.

‘Commodities & Equities Outlook Weekend 2018’ was recently organised at St. Regis, Lower Parel, Mumbai by Tefla’s in association with ANMI - Association of National Exchanges of Members of India, CPAI -Commodity Participants Association of India and The Solvent Extractors’ Association of India. The event covered outlook for crude oil, gold and silver, select base metals and major agri-commodities (vegoil, sugar, cotton). Domain experts examined the global and Indian market drivers and shared their outlook for the year.

The event started with a welcome address by the Kailash Singh, Managing Director, Tefla’s followed by The Big picture: The changing landscape of India’s Commodity & Equity Markets.

To name a few dignitaries present at the event are, Narinder Wadhwa, Alternate President, Commodity Participants Association of India (CPAI), Ankit Ajmera, Chairman, ANMI – Western Region, Sameer Patil, Head Business Development, BSE, Mrugank Paranjape, Managing Director & CEO, MCX, R K Das, Country Head, Chief General Manager, Small Industries Development Bank of India (SIDBI), Dr. Sarat Kumar Malik, CGM, Securities and Exchange Board of India (SEBI), Vijay Sardana, International Agribusiness Value Chain Expert & Member, CDAC, SEBI and many others. 

During the event, it was presented that, India's largest commodity futures trading platform, the Multi Commodity Exchange of India (MCX), expects "options" volumes to grow to a minimum of 60 per cent of underlying futures contracts within six months.

While gold options were launched in October 2017, the options basket was expanded during the past month or so, with the addition of other non-agri commodities such as silver, copper, zinc and crude oil. Other commodities are yet to see their first settlement and hence the response from traders is limited. Gold options recorded a daily average turnover of Rs 1,570.30 million when launched in last October, but the initial euphoria died down and trading fell to around 15 per cent of that level in February.

In order to boost volumes in this segment, the Securities and Exchange Board of India (Sebi) allowed market making in gold options, The move paid off, and daily average turnover exceeded Rs 6,460.5 million in May. In June (up to the 21st), however, the daily average turnover under gold options declined again to Rs 5,501.5 million. With this, volume under gold options jumped to 23.5 per cent of underlying gold futures.

"Any contract takes at least 18-24 months to become successful. A good international benchmark is an options-to-futures ratio of 60 per cent," said Mrugank Paranjape, Managing Director and Chief Executive Officer, MCX, on the sidelines of the Commodities & Equities Outlook Weekend 2018’.

While gold options have risen significantly in turn over the past two months through liquidity enhancement scheme, options volumes in other commodities remained lackluster. Contracts in silver, crude oil and copper are in the initial stage of traders' acceptance with options-to- futures ratio in the 2-3 per cent range. The exchange launched zinc options two days ago.

"In some options contracts, we have clocked a turnover of Rs 1-2 billion. Hence, we consider response very good," said Paranjape.

Apart from options contracts, MCX is working on extensively to expand its presence in the agri segment after finding success in crude palm oil (CPO), mentha oil and cotton. The exchange plans to engage 10-12 Farmer Producer Organizations (FPOs) in Maharashtra's Vidarbha, also known as farmers' suicide capital in India, for the direct benefit of the region's cotton farmers.

The overall daily average turnover of MCX has risen from around Rs 210 billion post crisis on the exchange in 2013 to Rs 240 billion currently.

At the event apart from this, Presentation on India INX – The Future of Derivative Trading was given by Pratap Chandiramani - Product Head - Product & Business Development- BSE. Followed by Capital Market Overview by Representative from Axis Securities, Angel Broking & Prasad DG (Head – Research, BSE).

2 Panel Discussions were conducted as per the following:

Panel Discussion on Agri Commodity Outlook was moderated by Rahil Shaikh, Trader & Sugar Market Analyst & who also spoke on Sugar and guests on the panel to speak on Cotton was Aurobinda Prasad, Vice President –Research, Kotak Commodities Services Pvt. Ltd. Sumesh Parasrampuria, CEO, Kunvarji Group was present to speak on Warehousing & Commodity Finance.

Panel Discussion on Commodity & Equity Market was moderated by Manisha Gupta, Editor- Commodities & Currencies, CNBC TV-18 and panelist were from Equity, Currency, Agri Commodity, Bullion sectors. Vikram Kotak, Managing Partner, Crest Capital & Investment, Jayaram Krishnamurthy, Co-Founder & COO, Almus Consulting, Atul Chaturvedi, CEO, Agri Business, Adani Group, Executive Chairman - Renuka Sugars Ltd & President – SEA, Sandeep Bajoria, CEO, Sunvin Group, Ranjith Singh, Products & Business Development, BSE were present to give the views.

For more information: http://www.ceoweekend.com/ or call on +91 9820991101 / +91 9820990012 / +91 7506502201