'Commodities futures to trigger next Green Revolution'

It won't be long before the second Green Revolution starts. While the first Green Revolution was triggered off by scientific developments, the next one will be market driven.

The National Commodities and Derivatives Exchange Limited (NCDEX), Multi-Commodity Exchange of India (MCX) and National Multi-Commodity Exchange of India Limited (NMCEIL) play a major role in ensuring some certainty in the prices that a producer can get in future.

Hence, the producers are saved from the uncertainties and vagaries of the market forces as there is certainty in prices, said Venkat R Chary, chairman, MCX.

He was speaking to Business Standard on the sidelines of a workshop, 'Enhancing Wealth Through Commodity Derivatives' organised by MATS School of Business and IT.

An efficient commodities market can put the country on a steeper growth trajectory. "Hence, it is necessary to make the commodity markets more efficient. To increase efficiency of the market, the three commodities markets will be inter-linked and real-time prices will be made available at all mandis," said Chary.

When there is glut in production there is a price crash and in case of agri-produce the crash makes producers move away from the commodity, often causing shortages of the commodity.

Organised exchanges help in standardisation of produce and higher price realisation for farm produce, which will eventually benefit farmers and other producers.

"If there is price stability there will not be such cycles of shortages and gluts," said Chary. Electronic tickers, each costing Rs 5 lakh, are being set outside all mandis and farmers will be able to know the real time prices, added Chary, speaking on the future plans of the commodity exchanges.

The commodity exchanges see Rs 10,000 crore of trade on an average every day and last year saw Rs 2 lakh crore worth of trade.

India is poised to become the biggest commodities market over the next decade.

While the country is among those with the biggest reserves of many of the metal ores, and is among the biggest producer of many of the metals, the prices of those metals are decided on the London Metal Exchange (LME) where hardly any of them is produced, said Chary.

On October 17, 18 and 19, the next international conference on commodities will be held in Mumbai.