1. What is international commodity trading?
You may know how commodity trades on the domestic market take place mostly on exchanges like the Multi Commodity Exchange (MCX) and the National Commodity and Derivatives Exchange (NCDEX). In fact, there are more than 50 such commodity exchanges worldwide. These offer physical trading and derivatives trading using spot prices, forwards, futures, swaps, and options on futures.
The market comprises a number of international commodity exchanges. Some notable ones are the Chicago Mercantile Exchange, the New York Mercantile Exchange, and the London Metal Exchange. Each exchange regulates transactions. They ensure that the commodities traded meet minimum quality and quantity standards. The exchanges themselves are regulated by national regulatory bodies.
The major commodities traded on international exchanges
are the following:
Including crude oil, heating oil, natural gas, and gasoline
Including gold, silver, platinum, copper, zinc, lead, tin, and aluminium
Livestock and meat
Including lean hogs, pork bellies, live cattle, and feeder cattle
Including corn, soybeans, wheat, rice, cocoa, coffee, cotton, and sugar
International Commodity Exchanges
The following are the major commodity exchanges worldwide:
2. What types of clients trade overseas?
A person resident in India, who has a commodity exposure and who faces risks due to volatile commodity prices, can hedge the price risk in international commodity exchanges or markets. One way to do this is to use hedging products that are exchange traded. Some examples are futures and options. You could also look at over-the-counter (OTC) derivatives as permitted by the Reserve Bank of India (RBI) from time to time. Prior approval from the RBI / or an authorised AD Category 1 bank is required.
Companies allowed to transact in commodity markets include the following:
3. How does Kotak Commodities help its clients to trade on the overseas market?
In our domestic operations, we are a trading-cum-clearing member of the leading national commodity exchanges. But Kotak Commodity Services Pvt. Ltd (KCSPL) also introduces its clients to a bouquet of the world’s biggest international brokers. We have entered into an Introducing Broker Agreement with these global brokers for various exchange-traded and OTC products.
We assist in identifying the appropriate broker and international exchange according to your hedging need., We also get the necessary RBI or AD bank approval and complete the documentation for you. Meanwhile, the international global broker offers trading, clearing, and research services in compliance with the norms of international exchanges.
4. Key features of trading through Kotak Commodities
We have a dedicated centralized trading desk where clients can call and trade. You can also call our international broker directly to place trades. Besides, our robust risk management systems and extensive research support meet the highest industry standards.
A dedicated relationship manager will be in constant touch with you to cater to all your needs.
5. Email ID and board line number for international queries
For any kind of query, email us at email@example.com or dial 022-6652-8800.