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Commodity Exchange Market in Bangladesh

In: Business and Management

Submitted By kamaluahmed
Words 872
Pages 4
Commodity Exchange Market in Bangladesh
Prepared by Kamal Uddin Department of Banking &Insurance Faculty of Business Studies, University of Dhaka

Outline
 Rationale  Define Commodity & Commodity Exchange Market  How Commodity Exchange Market Works?  Necessity of Commodity Exchange Market in our Economy  Requirement for a Commodity Exchange Market  What Bangladesh Doing?  Recommendation

Rationale: Price Volatility in Our Economy

Reason Behind Price Volatility
• Intermediaries between producers & end-consumers. • Syndication. • Absence of a proper market system. To remove this barrier a proper market system is required where buyer and seller will have the regular & updated information of market, they will have direct access to market for buying and selling their desired products. This can be done by establishing a Commodity Exchange Market

Define Commodity and Commodity Exchange
• A Commodity is a product which has a commercial value. It can be produced, bought, sold and consumed. • A commodities exchange is an exchange, just like any Stock Exchange where various commodities and derivatives products are traded. Most Commodity Exchanges across the world trade in agricultural products and other raw materials • To be traded on an Exchange must meet certain specification regarding self life, quality standard, demand and supply and some more.

Functionalities
Spot or Cash
• Direct buy and sales • Usually for immediate consumption • Immediate delivery & payment

Futures
• Agreement made to receive commodity on a later date • Decide price today • Deliver and pay (part) later • margin only now

The whole Market System
USERS Farmers & Farmer Cooperatives (Hedgers) Investors (Speculators) Traders (Arbitrageurs) Logistics Companies
Storage & Transport Requirements Quality Certification Requirements

SUPPORT AGENCIES Public Warehouses...

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