Building Awareness on Commodity Futures to Increase Market Participation

Business Wire India

In order to increase the market participation in commodity futures market and to educate the commodity ecosystem participants about hedging price risks, Multi Commodity Exchange of India Ltd (MCX), organised a commodity awareness programme in association with the Forward Markets Commission (FMC) at Bhubaneswar on Feb 7.

Expounding on the various aspects of commodities trading in India, the experts briefed about the functioning of Commodity Exchanges and the benefits of commodity futures for trading. They also gave an insight into the technicalities of the commodity markets with respect to the products, price discovery, transparency and risk management mechanism in trading and settlement of transactions.

Speaking about the price risks faced by the market participants due to volatility in commodity markets, Mr. Vibhor Tandon, Assistant Vice President-Business Development, MCX said, “It is important for the market participants to hedge their price risks in futures market, by trading on a regulated commodity exchange such as MCX.”

“We are happy with the response to the awareness programme held at Bhubaneswar. MCX has been playing a critical role in imparting knowledge to the market participants by organising commodity awareness programmes across the country”, he added.

The purpose of the platform was to create an understanding of the commodity futures market among the participants, which would enable them to manage their price risks better. They further elucidated on the topics such as the approach to price risk management, role of commodity futures exchanges, and the regulatory perspective.

A key takeaway was also the feedback from audience that such programmes greatly benefit market participants and also gives them an opportunity to interact with experts in the field. The participants were keen to learn more about the various innovative futures contracts in the bullion, base metals and agri segment offered by the Exchange.

 

[Subiksha Anand]

Business Wire India

In order to increase the market participation in commodity futures market and to educate the commodity ecosystem participants about hedging price risks, Multi Commodity Exchange of India Ltd (MCX), organised a commodity awareness programme in association with the Forward Markets Commission (FMC) at Bhubaneswar on Feb 7.

Expounding on the various aspects of commodities trading in India, the experts briefed about the functioning of Commodity Exchanges and the benefits of commodity futures for trading. They also gave an insight into the technicalities of the commodity markets with respect to the products, price discovery, transparency and risk management mechanism in trading and settlement of transactions.

Speaking about the price risks faced by the market participants due to volatility in commodity markets, Mr. Vibhor Tandon, Assistant Vice President-Business Development, MCX said, “It is important for the market participants to hedge their price risks in futures market, by trading on a regulated commodity exchange such as MCX.”

“We are happy with the response to the awareness programme held at Bhubaneswar. MCX has been playing a critical role in imparting knowledge to the market participants by organising commodity awareness programmes across the country”, he added.

The purpose of the platform was to create an understanding of the commodity futures market among the participants, which would enable them to manage their price risks better. They further elucidated on the topics such as the approach to price risk management, role of commodity futures exchanges, and the regulatory perspective.

A key takeaway was also the feedback from audience that such programmes greatly benefit market participants and also gives them an opportunity to interact with experts in the field. The participants were keen to learn more about the various innovative futures contracts in the bullion, base metals and agri segment offered by the Exchange.

The MCX-led commodity awareness programme held in Bhubaneswar marks an important initiative in bridging the knowledge gap that has long hindered broader participation in India's commodity futures market. While commodity derivatives remain a critical risk management tool globally, they are still met with hesitation or misunderstanding by a large section of Indian market participants, especially in smaller cities and among smaller businesses. By collaborating with the Forward Markets Commission (FMC), MCX has taken a vital step toward making the concept of hedging price risk not only accessible, but also actionable for traders, producers, and investors at the grassroots level.


One of the most compelling aspects of the event was its practical orientation—far from a high-level corporate seminar, the programme focused on demystifying commodity futures for those who face the consequences of price volatility firsthand. Mr. Vibhor Tandon’s emphasis on regulated exchanges like MCX serving as a safe and structured environment for hedging strategies hits at the core of India’s risk management crisis. In sectors like agriculture and base metals—where global prices, weather patterns, and supply-chain shocks can upend income overnight—the absence of hedging is not just risky, it’s financially debilitating.


What makes this kind of initiative particularly commendable is its contextual relevance. Bhubaneswar, being close to agrarian regions and emerging industrial corridors, houses both producers and SMEs that are directly impacted by price movements in commodities like pulses, oilseeds, metals, and bullion. By bringing the event to them—instead of limiting it to metros or financial hubs—MCX and FMC are addressing the geographic and informational asymmetries that have historically plagued India’s financial markets.


But this initiative isn’t merely about education; it’s about empowerment. By providing insights into price discovery mechanisms, transparency protocols, and settlement systems, MCX is equipping participants with the tools to engage confidently in futures trading. Many small players traditionally avoided commodity derivatives due to perceptions of complexity or fears of manipulation. Programmes like this one challenge that narrative by demonstrating how structured and transparent modern commodity exchanges have become.


Another noteworthy highlight is the feedback loop incorporated into the event. The audience’s enthusiastic response and desire to delve deeper into innovative futures contracts—especially in bullion, base metals, and agri segments—reveals an untapped appetite for financial literacy among participants. It’s a reminder that India doesn’t lack entrepreneurial or risk-taking spirit; it often lacks the right platforms and information to harness that energy effectively.


However, a deeper takeaway lies in the regulatory undertone of the discussions. The mention of the role of commodity futures exchanges and the broader regulatory perspective is crucial at a time when financial markets in India are undergoing rapid digitalization and structural shifts. Trust remains the backbone of market participation. Ensuring that traders and hedgers view these exchanges not as speculative arenas, but as instruments of financial discipline and stability, is essential for deeper market penetration.


In conclusion, the MCX-FMC awareness programme is a blueprint for how financial institutions should approach inclusion—not by pushing products, but by facilitating understanding. If scaled effectively and supported by continued handholding, such initiatives can transform the commodity ecosystem in India. From farmers to MSMEs, many stand to benefit—not only in protecting their margins but in building resilience against a highly volatile global economic landscape. India’s journey toward mature, transparent, and inclusive financial markets will depend heavily on replicating this kind of grassroots financial education across the country.

 

[Dhruv Bindhani]

The Multi Commodity Exchange of India Ltd (MCX), in collaboration with the then-Forward Markets Commission (FMC), organized a significant commodity awareness program in Bhubaneswar on February 7, aimed at bolstering market participation and educating stakeholders on effective price risk hedging. This initiative underscored a crucial commitment to fostering a more informed and resilient commodity ecosystem in India.

Educational Focus and Market Insights​

The program served as a vital platform for demystifying the complexities of India's commodity futures market. Experts from MCX detailed the fundamental functioning of commodity exchanges and elucidated the tangible benefits of futures trading. Participants gained valuable insights into the technical aspects of these markets, including product specifics, the intricate process of price discovery, the importance of market transparency, and the robust risk management mechanisms employed in trading and transaction settlements. The sessions were designed to equip attendees with practical knowledge, enabling them to navigate market volatilities more effectively.

MCX's Proactive Role in Risk Management​

Mr. Vibhor Tandon, Assistant Vice President of Business Development at MCX, highlighted the critical necessity for market participants to actively hedge their price risks within the regulated futures market, emphasizing MCX's role as a reliable platform for such activities. His statements reflected MCX's understanding of the inherent volatility in commodity prices and the need for participants to mitigate potential losses. The positive reception to the Bhubaneswar program was a testament to MCX's consistent efforts in organizing similar awareness initiatives across the country, playing a pivotal role in imparting crucial market knowledge and building confidence among participants.

Cultivating Understanding and Engagement​

Beyond theoretical explanations, the program also delved into practical approaches to price risk management, the overarching role of commodity futures exchanges, and the pertinent regulatory perspectives governing them. A key success factor was the direct feedback from the audience, affirming the immense value such programs bring by providing a unique opportunity to interact directly with industry experts. The keen interest shown by participants in MCX's innovative futures contracts—spanning bullion, base metals, and the agri segment—further underscored the relevance and impact of the educational outreach. This interactive engagement not only enriched the participants' understanding but also provided MCX with valuable insights into market needs.

 

[Rick Sanchez]

Interesting!