''The turnover as proportion to GDP of commodity trade increased from 4.7 per cent in 2004 to 20 per cent in 2007 and is expected to go up many folds since commodity markets would remain friendly to its subscribers,'' said Assocham President Sajjan Jindal. The daily average volume of trade in commodities exchanges by December 2007 was over Rs 12,000 crore, he added.
Gold, silver and crude recorded the highest turnover in MCX, while in NCDEX, soya oil, guar seed and soyabean. On the NMCE pepper, rubber and raw jute were the most actively traded commodities on an average.
''This trend is likely to continue,'' the industry body said.
The study points out that futures trading in commodities results in transparent and fair price discovery on account of large-scale participation of entities associated with different value chains.
''This reflects upon the views and expectations of a wide section of investors related to that commodity. It provides an effective platform for price-risk management for all segments of players ranging from producers, traders, processors, exporters/importers and the end-users of a commodity,'' the chamber said.
On constraints, major challenges and policy options of commodities futures, the study points out that commodity futures markets are the strength of an agricultural surplus country like India.
''Commodity exchanges play a pivotal role in ensuring stronger growth, transparency and efficiency of the commodity futures markets. This role is defined by their functions, infrastructure capabilities, trading procedures, settlement and risk management practices,'' said the chamber.
However, Indian commodity exchanges are still at a nascent stage of development as there are numerous bottlenecks hampering their growth, it added.
Some of the major problems associated with commodity markets in India include infrastructure, trading system, broking community, controlled market, integration of regional and national exchanges as also integration of spot and futures markets, the study pointed out.