What is NCDEX in India?

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What is NCDEX in India?

What is NCDEX in India?

Are you a beginner in the stock market or in the commodity market?

So, this article is for the beginner and for the trader or the individual that doesn’t know much about the commodity market.

Before beginning the article, I would like to ask some simple questions to check whether you can answer them or not.

Do you know why the traders or investors invest in commodity markets?

If your answer is no then don’t worry I will give the answer in our article in further and if you guess the answer let check with me whether you are on right track or not.

So, are you ready to know more about the “What is NCDEX in India?”

Okay then get yourself comfortable and read with a peaceful mind.

Introduction for commodity market:

The commodity market has an important impact on the Indian economy and boosted the economy.

The Indian Stock Market is most famous when more and more numbers of the traders or the investors that participate and the amount of the total capital invested.

Trading in the agro-based products makes the trade market balanced.

In the previous article, we had also discussed on a brief about one of the commodity exchange in India is “What is MCX in India?” you can also refer this blog to understand the MCX market in India.

In the further article, we will discuss another popular exchange in the commodity is NCDEX.

What is NCDEX in India?

The full form for NCDEX is National Commodity and Derivatives Exchange Limited that is an Indian based public company.

It was founded on 23rd September, 2003 and the NCDEX is an online commodity exchange centre.

This was incorporated under the Companies Act, 1956 and it is regulated by the guidelines of the Securities Exchange Board of India (SEBI).

All the agricultural and metal commodities are traded on these exchanges.

NCDEX is an expert leader in the market of agricultural commodities.

The National Commodity and Derivatives Exchange has their own board of independent directors and it is the only exchange for the commodities that are promoted by the national institutions in India.

NCDEX is different from the MCX (Multi Commodity Exchange) as MCX deals in hard commodities and the NCDEX deals in soft commodities. The mode of the operations varies in both the exchange.

The private company, any individuals, public company etc. can become members in these exchanges.

Commodities that are traded on NCDEX

Some of the commodities that are traded on NCDEX Exchange, there are many more in this list and this is the soft commodities. Total there are 31 agricultural or non-agricultural products listed in the exchange.

Head-Points Products
Cereals and Pulses: Bajra
  Maize Kharif
  Maize Feed Industrial Grade
Fibres: Kapas
  29 mm Cotton
Guar Complex: Guar Seed 10 MT
  Guar Gum
Oil and Oil Seeds: Castor Seeds
  Cotton Seed Oil Cake
  Soy Bean
  Refined Soy Oil
  Mustard Seed
  Crude Palm Oil
Soft: Sugar M
Spices: Pepper

NCDEX Live Quotes & NCDEX Live 24 Rate Link: https://www.ncdex.com/MarketData/LiveFuturesQuotes.aspx

Why should one trade in commodities?

This was the question that I asked previously and for the traders or the investors that don’t know the reason can get the understanding through this.

For the traders or the individual that has guessed the answer can cross-check the answer.

Mainly, the traders or the investors can be used for the purpose of hedging.

Physical delivery and the cash settlement are applied to the commodities.

All the things for making the physical settlement are compulsory in the commodities and this happens under the eye of SEBI.

When making any of the trades in commodities you need to be aware of the term mark to market settlement as the prices of commodities are volatile.

 Every trading session overs in the particular day, the difference is to be calculated with the agreed price.

If the price is moved in your favour then the difference will be credited to the account and vice versa if it is not in the favour then the difference will be debited.

This process of adjusting the prices is stated as the mark to market settlement.

Benefits of Trading in Commodity Market

  • Risk Management
  • For Mitigating Risk
  • It helps in Price Discovery

How to trade in NCDEX in India?

The trader or the investor can trade in both the exchanges for the commodity market can be on MCX or NCDEX.

In this, the trading of commodity market is different from the equity futures market.

The trader who had long the position in the commodity can treat this as a trading position and can sell out or another way to take the physical delivery of the commodity.

The trader who had short the position can square of the position by buying back the commodity future or can choose to give the delivery to the warehouse.

Commodity futures are used for hedging the price risk of the farmers growing oilseeds and the oil company purchasing the oil seeds etc.

Misconceptions about the Commodity Market:

  • Offers poor quality of commodities
  • Difficulty in commodity trading
  • Large traders get the benefits


The National Commodity and Derivatives Exchange is the large commodity exchange that offers the platform for trading in soft commodities and some metals.

It has more than 600 warehouses with the capacity to hold 1.5 million tons of commodity production at a single time.

This is not as huge as the MCX is as it is third largest across the world, but the NCDEX is very crucial commodity exchange for India.

Traders or the investors that are trading in the NCDEX can easily get the guidance from the NCDEX agents and brokers.

The economy is not solely dependent on the commodity market but also makes its most of the time for the stock market.

If the trader gets the idea and practice for predicting the market then he can turn his practice into money.

NCDEX Website

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