Regional commodities exchanges to go online

All the regional commodities exchanges across the country are planning to unite and come on a common platform to compete with the national commodity exchanges.

The three commodity exchanges in Gujarat "" Ahmedabad Commodity Exchange, Surandranagar Commodity Exchange and Rajkot Commodity Exchange "" along with the Mumbai Commodity Exchange, Indore Commodity Exchange and Cochin Commodity Exchange are in talks to unite all the 22 regional commodities exchange across the country and offer online trading across all exchanges.

All the regional commodity exchanges across the country are expected to sign agreements for online commodities trading in the next one year.

"We are planning to unite all the exchanges across the country to come on a common platform and offer online trading across all exchanges. So far six exchanges, such as Ahmedabad, Surandranagar, Rajkot, Mumbai, Indore and Cochin, have agreed and we are in talks with other exchanges. In next one year we expect all the commodities exchanges to go online," PravinBhai Thakkar, president, Ahmedabad Commodity Exchange Limited told Business Standard on Wednesday.

With the three national commodity exchanges (National Commodity Exchange, Multi Commodity Exchange and National Multi Commodity Exchange) coming up in the last few years, the volume of trading at the regional commodity exchanges have reduced substantially. The Ahmedabad Commodity Exchange had a turn over of only Rs 37 lakhs in the last financial year.

"There is need to bring the regional commodity exchanges on a common platform. We need delivery rule for each of the commodity. The regional commodity exchanges need to have their own cash reserves like the BSE having reserves of over Rs 100 crore. Infrastructure needs to be developed," said Deena Mehta, a stock broker.

The Federation of Indian Commodities Exchanges (FICE) is the regulatory body for the regional commodity exchanges, which needs to be strengthened.

"We are trying to provide identity to each of the regional commodity exchanges. FICE needs to gear up to bring the dying regional commodity exchanges on a common platform," said P M Chheda, president, Mumbai Commodity Exchange.

"At present the regional commodities exchanges are facing threat from the national commodities exchanges. In the future regulatory restrictions may be imposed on the regional commodities exchange because of the national commodity exchanges, so the regional commodity exchanges need to come up together," said Thakkar.