Page 267 - DCOM507_STOCK_MARKET_OPERATIONS

Stock Market Operations

Notes 13.3.2 Wholesale Price Index

The Wholesale Price Index (WPI) has been the most commonly accepted price index in India. It
signals the ups and downs of the commodity prices, in all trades and transactions taking place
across the country. The updated WPI is available in every week, with the time lag between two
weeks being reduced to the minimum possible level. It catches the price movements in an
extensive manner. For all these qualities, it is the most prevalent price index in India. It is also
viewed as an indicator of the inflation rate of our economy.

13.3.3 Commodity Export Scenario

India masters the global castor oil trade with its castor seed and oil products. The yearly export
of commercial castor oil from India turns out to be around 2-2.4 lakh tons. India is known to be
the fifth largest producer of aluminium in the globe. Indian aluminium has huge export potential
as its production far exceeds its domestic demand.
The export market for Indian organic agricultural products is expanding rapidly. India’s organic
tea is world-famous for its taste and flavour. Tea, coffee, spices, rice, wheat, pulses, oil seeds,
fruits and vegetables, cashew nut, cotton, herbal products are the major organic products being
exported from India.

Did u know? The commodity market in India is growing rapidly with huge export potential.
Though it is temporarily lagging behind the service sector in the matter of exports, it is
sure to catch up within a few years.
Self Assessment

Fill in the blanks:
10. The …………………… has been the most commonly accepted price index in India. It signals
the ups and downs of the commodity prices, in all trades and transactions taking place
across the country.
11. Forward trading was banned in …………………… except for pepper, turmeric, castor seed
and linseed.

13.4 Current Developments in this Market

The government has now allowed national commodity exchanges, similar to the BSE & NSE, to
come up and let them deal in commodity derivatives in an electronic trading environment.
These exchanges are expected to offer a nation-wide anonymous, order-driven, screen-based
trading system for trading. The Forward Markets Commission (FMC) will regulate these
exchanges.
Consequently, four commodity exchanges have been approved to commence business in this
regard. They are:
Multi Commodity Exchange of India Ltd. (MCX) located at Mumbai

National Commodity and Derivatives Exchange Ltd. (NCDEX) located at Mumbai
National Board of Trade (NBOT) located at Indore
National Multi Commodity Exchange (NMCE) located at Ahmedabad.

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