India has made considerable and quick advancements in online commodity trading over the years. Currently, both hard and soft commodities are traded in India. The top commodities, which have a short shelf life, include agricultural products like wheat, soybeans, cotton, and corn, as well as metals, crude oil, and precious metals.
On MCX alone, you may trade the futures and options of more than 20 different commodities! These goods are divided into groups like agricultural goods, base metals, precious metals, and energy. When it comes to online commodities trading, that's not all, even more commodities are available for trading on other platforms. You may better organise your approach if you are aware of the list of commodities traded in India on exchanges like MCX and NCDEX.
Types of Commodities in India
You have the choice to trade F&O of a variety of commodities as a retail trader. These products are divided into two major categories:
1. Soft Commodity: Agricultural products include seeds, wheat, fruits, and vegetables.
2. Hard Commodity: Products used in industry, such as metals, crude oil, and petrol.
These two commodities' f&o are traded on several commodity markets. The National Commodity and Derivatives Exchange (NCDEX) and the Multi Commodity Exchange of India (MCX) are two of the most well-known commodity marketplaces in India.
You'll note that the commodities exchanges in India have an odd quality. The kinds of commodities on MCX and NCDEX slightly overlap in several areas. But both platforms also provide a number of solo goods.
As a result, understanding the list of commodities traded in India by exchange can help you use futures and options contracts successfully.
Table of Content
Top Commodities Traded in India
India is a varied nation that produces top commodities and trades a variety of goods. Some of the best commodities to trade in the list of Indian commodity marketplaces are listed below:
1. Farming Products
Cotton: Cotton is the most important textile fibre and natural fibre used to make clothing, and India is one of the countries that produces the most of it.
Soybean: Even though soybeans are one of the most popular commodities, variables like the weather, the need for dollars, and biodiesel have an impact on trading.
Wheat: In 2022, the export value of wheat, a basic commodity in India, was 2121 million. The whole Indian agri-commodity market, as well as wheat production and export, are significantly impacted by weather and natural disasters.
Gold: Due to its rarity, gold is one of the most expensive metals. Due to the fact that it keeps its purchasing value even during times of inflation, the majority of people utilise it as a financial asset.
Silver: Due to its wide range of applications, silver is in great demand. These three sectors—industry, investment, and jewellery (decor)—are the main sources of demand for silver in the commodities trading market. 95 percent of the yearly demand for silver comes from these 3 industries.
Crude Oil: Due to its reliance on it for a substantial portion of its energy demands, India is one of the biggest importers of crude oil. The benchmark crude oils for the pricing of the commodity are West Texas Intermediate and Brent Crude Oil.
India is also producing natural gas, much like crude oil. With 10.7 billion in imports in 2021, it holds the fourth-place position internationally. With a total contribution of 0.7% to the global reserve, India ranks 22nd in terms of natural gas reserves.
4. Base Metals
Aluminium: India produces 2.8 million metric tonnes of aluminium annually in the category of base metals. Aluminium is one of the most widely used metals in commodity trading due to its variety of uses.
Copper: Due to its strong demand, copper has a high level of market liquidity and is a preferred commodity for trading.
Zinc: India is a major producer of zinc due to its numerous uses in building, industrial, and electrical applications. It produces 1.5 million metric tonnes of zinc annually, ranking it as the eighth-largest producer in the world. India is a source of zinc imports for nations including China, Singapore, the US, and Japan.
How is the Indian Commodity Market Operated?
The commodities spot market and the commodity futures market operate separately in the Indian setting. For instance, the state governments often have jurisdiction over the commodities spot market or, in some circumstances, the agriculture ministry. SEBI oversees the futures and options markets for top commodities. Even in options, the contracts with the most liquidity are those that are based on commodity futures rather than spot commodities.
Markets for genuine physical delivery via warehouses and speculative trade both exist in India. However, in order to avoid a large increase in margins, speculative traders must close out their holdings before the physical expiry time. Cycles in commodity contracts are similar to those in the equities F&O market. Commodity derivatives are settled in cash as well as through real physical delivery.
The top commodities traded in India are rice, wheat, sugar, cotton, tea, spices, pulses, oilseeds, dairy products, iron and steel, petroleum products, jewels, and jewellery. These goods are essential for satisfying domestic demand, sustaining diverse businesses, and boosting India's economy. In India, there are several commodities trading applications available where one may trade in stocks, metals, and agricultural items. As one of the leading commodities brokers in India, blinkX attracts a sizable community of traders by providing unmatched services and an easy-to-use smartphone blinkX trading app.
Top Commodities Traded in India FAQs
India does export a lot of different items. It is a significant exporter of rice, cotton, spices, drugs, jewels, and jewellery. In addition, it exports steel and iron goods.
The primary agricultural products sold in India include fruits and vegetables, rice, wheat, sugar, cotton, tea, spices (including cardamom, turmeric, and cumin), pulses (lentils, chickpeas), oilseeds (soybeans, groundnuts), and sugar.
A number of variables, including global supply and demand dynamics, domestic production levels, global market trends, currency exchange rates, governmental regulations, and geopolitical considerations, influence commodity prices in India.
The National Commodity and Derivatives Exchange (NCDEX), the Multi Commodity Exchange (MCX), and the Indian Commodity Exchange (ICEX) are the three main commodity exchanges in India.
The Securities and Exchange Board of India (SEBI) does regulate commodities trading in India.