)
The turnover of 22 commodity bourses fell by 42% to Rs 4,07,670 crore in the first fortnight of July mainly due to sharp fall in business at MCX following the imposition of commodity transaction tax (CTT) on the futures trading of non-farm items and some processed food.
The turnover of these commodity bourses stood at Rs 7,08,342 crore during the June 16-30 period, the immediate fortnight before the introduction of CTT.
CTT of 0.01% has been made effective from July 1 on the futures trading of non-agri commodities and processed foods. The government has exempted 23 agricultural commodities from the new tax.
"The volumes have definitely come down at MCX due to CTT. This exchange can still survive but others especially UCEX, ICEX and ACE would have tough time," a senior Consumer Affairs Ministry official said.
The turnover at MCX -- which has more than 80% market share in the commodity futures market -- fell by 44.34% to Rs 3,59,690 crore in the first fortnight of July this year, as against Rs 6,46,329 crore in the previous fortnight, as per the data released by regulator FMC.
"The trading volumes on MCX have plummeted after introduction of CTT as arbitrators left the market. MCX largely offers trade in bullion and metals and hence impact was more," said Harish Galipelli, Head, Commodity and Currency Derivatives at JRG Wealth Management Ltd.
Besides MCX, the turnover at the Universal Commodity Exchange (UCX) fell by 76% to Rs 1,297 crore in the first fortnight of July, as against Rs 5,333 crore in the previous fortnight.
Similarly, the business at Indian Commodity Exchange (ICEX) declined by 73% to Rs 1,977 crore from Rs 7,330 crore, while the turnover at ACE Derivatives and Commodity Exchange dipped by little over 48% to Rs 1,498 crore from Rs 2902 crore in the review period.
Interestingly, the turnover at NCDEX -- the country's second biggest commodity bourse -- did not see a massive decline. The business at this exchange declined marginally by 1.5% to Rs 36,691 crore in the first fortnight of July, as against Rs 37,257 crore in the previous fortnight.
