Commodity market regulator, Forward Market Commission is planning to install price ticker boards in 1000-1200 APMC regulated market yards in the country to provide price trend of different commodities to farmers for better price discovery.
The programme is being funded by Central government and commodity exchanges in a 65:35 expenditure arrangement model as part of the consumer awareness programme.
“We plan to cover 1,000-1,200 market yards at an investment of Rs 1 lakh per ticker board in the current fiscal,” B C Khatua, chairman, Forward Market Commission said.
Farmers will be aware of the current price trend, which will facilitate better selling decision and higher price for their produce, he said.
Government had installed 183 ticker boards last fiscal in 14 states and is likely to cover most of the states this year. Presently, there are 7,500 regulated market yards (mandis) in the country and the government plans to cover all markets in near future.
Khatua said that in the initial phase, 40 market yards would be covered in Karnataka. Commodity futures market has witnessed exponential growth in India in recent time on the back of better price discovery mechanism, prompt delivery with lesser chances of price manipulation.
However, volume growth is still restricted due to ban on participation of banks, mutual funds and foreign institutional investors in the commodity market.
Further, undue delay in amendment of Forward Contracts (Regulation) Act, 1952 (FCRA) has also acted as a dampener for future business growth. “Government is looking into the FCRA amendment bill. However, there is no timeline yet on its approval by the Centre,” Khatua said.
As per industry experts, the proposed amendment will provide much needed liquidity and depth to the sector and help setting up an efficient delivery system.
Presently, many contracts trading in the commodity exchanges are illiquid or not trading up to desirable level.
“FMC is in constant discussion with exchanges regarding illiquid contracts and is trying to find out the reason behind such less trade volume. It’s our perception that the market players should be more aware about the commodity contract for impressive volume growth,” he said.
In the wake of new national exchanges coming up in near future, he said that as penetration of commodity market was at a lower level as of now, new exchanges would boost the market volume by adding new players than eroding volume growth.
