Best Commodity Exchange in India – List of Top 4 Commodity Exchanges

In this article, we will discuss about Best Commodity Exchange in India.

Commodity trading is not as popular in India as compared to equity and derivatives. This is mainly because of the uncertainty this market has to offer.

The commodity market trades in physical commodities, which can be affected by both natural as well as human-made disasters.

Hence, this market does not look very lucrative to conservative investors. However, for those who wish to gain experience in this, understand how profitable the commodity market can be!


Basics of Commodity Trading

Various hard and soft commodities are traded in the market. The forces of demand and supply help in the price valuations.

Best Commodity Exchange in IndiaIn order to start trading in the commodity market, you first need an account with commodity exchange. Due to the digitalization, all the exchanges work through online mode only.

A commodity exchange works as an exchange platform where buyers and sellers of different commodities and their derivatives meet and trade.

These exchanges deal in different kinds of products like agricultural products, metals, and more. The trades are made on a global level.

The contracts are also made in the form of futures, options, spots, and forwards. These derivative contracts derive their values based on movements in the commodity market.

Online commodity exchanges have made the process of buying and selling much simpler when compared to the age-old physical exchanges.

Now, just by sitting in the comfort of their home, people can be a part of these exchanges.

The live prices of commodities trading on different exchanges can be checked online using several websites.


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    Top 4 Commodity Exchanges in India

    Below is a list of leading commodity exchanges in India along with the commodities that are traded on these:

    • MCX or Multi Commodity Exchange of India Ltd.
    • National Commodity and derivative exchange Limited or NCDEX
    • Indian commodity exchange Limited (ICEX)
    • ACE derivatives and commodity exchange

    MCX – Top Commodity Exchange in India

    Established in November 2003, MCX accounts for almost 86% of the market share of India’s commodities exchange. Multi Commodity Exchange holds position 1 in global ranking for different commodities.

    For example, it is the largest commodity exchange for gold and silver. As for natural gas, it has the second rank. For crude oil, MCX ranks third globally.

    MCX deals in 40 commodities divided into several categories. The following are the major commodities traded in this exchange:

    • Agricultural products: cotton, crude palm oil, cardamom, black pepper, Kapas
    • Energy: Crude oil, Natural gas, Brent Crude Oil
    • Metals: Aluminium, Copper, lead, nickel, nickel mini, copper mini, Zinc, brass
    • Bullion: Gold, silver, silver mini, gold mini, gold petal, silver macro

    In order to start trading in the commodities mentioned above, the users must have an account created with the MCX.


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    NCDEX – Number 2 Commodity Exchange in India

    National Commodity & Derivatives Exchange or NCDEX came into existence in December 2003 with headquarters in Mumbai. The exchange has its offices and branches spread all across the country.

    The initial founding member organizations of NCDEX included big names like ICICI Bank, LIC, NABARD, IFFCO, and Goldman Sachs.

    The central focus of NCDEX is on the trade of agricultural commodity derivatives. Out of the 27 contracts traded on NCDEX, 25 belong to those of agricultural products.

    Due to a large number of spices present in India, NCDEX is like a global standard for the pricing of spices.

    NCDEX deals in 50+ commodities. Some of the major ones are:

    • Gold
    • Silver
    • Wheat
    • Chana
    • Barley
    • Kapas
    • Gum
    • Castor
    • Cotton
    • Guar

    ICEX – One of the Best Commodity Exchange in India

    The ICEX is regulated by the Securities Exchange Board of India (SEBI). It also has its headquarters in Mumbai.

    Some prominent financial institutions like the Punjab National Bank, IDFC Bank, IBFS, etc. are principal shareholders.

    ICEX was the first to initiate the derivative contracts of diamonds for trading. This exchange aims to trade in all commodities that have economic relevance for the Indian economy. The exchange operates from Monday to Friday.

    The square off timings for agricultural commodities is 5:00 pm, whereas non-agricultural products have been extended to 11:30 pm.

    In 2017, ICEX merged with NCME to become India’s third-largest commodity exchange.

    The following are the major commodities traded over ICEX:

    • Diamond
    • Steels
    • Castor seeds
    • Soya
    • Raw jute
    • Rubber
    • Guar seeds
    • Bean oil

    Understand in Detail about Commodity Market here

    Learn about Commodity OptionsTypes of Commodities Traded
    Learn about Commodity FuturesCommodity Trading Tax
    What is Hedging in Commodity?What is MCX?
    Commodity MarketWhat is NCDEX?

    ACE Derivatives and Commodity Exchange

    ACE stands for Ahmedabad commodity exchange. The ACE derivatives and commodities exchange was founded in October 2010.

    Since then, it is one of the leading commodity exchanges in India. It initially started only as a regional commodity market in Ahmedabad.

    However, soon, it was upgraded to deal at a national level. This was possible with the help of hundreds of brokers who got associated with the exchange.

    Kotak Mahindra owns a 51% stake in Ace derivatives and commodity exchange. Some other prominent institutions which hold a stake are Bank of Baroda, Union Bank, HAFED, etc.

    The following are the significant commodities contracts traded:

    • Soy oil
    • Gold
    • Silver
    • Copper
    • Crude oil
    • Castor seeds
    • Mustard seeds
    • Soybeans

    Top 5 Commodity Exchanges in India – Conclusion

    Apart from these significant four commodity exchanges, the Universal commodity exchange (UCX) was set up in 2010, but due to regulatory issues, it had to be shut down in 2014. So, now India has four major stock exchanges for commodity trading.

    The NSE and BSE also offer commodity derivatives. Only select commodities are available for trade in these two exchanges. However, the point to be noted here is that there is no best exchange.

    The commodity exchange you choose to have an account with will depend primarily on the commodity you wish to trade in.

    For example, diamond derivatives are provided just by selected exchange, so if you want to enter into that trade, you need to have an account with that particular exchange.

    Similarly, there is a wide range of agricultural commodities that are traded. In order to trade in a specific commodity, you need to weigh in the pros and cons of different exchanges offering those.

    By doing in-depth research about the different exchanges in India, you will be able to decide the one that is best suited for you.

    There are no sure shot profits; you just need to understand how to manage your risk in the market. An exchange is just a medium through which you can trade. This in no way affects your returns.


    Open a Commodity Demat & Trading Account Now! – Fill up the Form

      Fill Your Details Here
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