)
Following favourable intention shown by the commodity derivatives markets regulator Forward Markets Commission (FMC), the agri-centric National Commodity & Derivatives Exchange (NCDEX) is planning to apply for approval of the re-launch of futures trading in tur, urad and rice.
“We are planning to planning to apply for approval of the contract within seven – 10 days,” said Samir Shah, managing director of NCDEX.
This comes in the wake of the FMC chairman Ramesh Abhishek stating in Panji on Thursday that the regulator is considering favourably to bring back futures trading in tur, urad and rice shortly.
When pulses prices started hitting the roof in 2006-07 owing to short supply, critics blamed futures trading for the price rise, resulting in the FMC’s banning trading in these commodities in 2007. Subsequently, the government set up a committee headed by Planning Commission member Abhijit Sen, which reported future trading has connection with price rise. The committee found that the price movement of any commodity depends on demand and supply and that future trading cannot be blamed for the same.
During the past six years, regulation has improved significantly with a more vigilant regulator and checks and balances in place.
“Future trading in pulses was demanded by commodities participants, being one of the most popular contracts at the NCDEX before suspension. There is good scope in this segment as a lot of import is happening in India, which needs to be hedged. Locally also, pulses have been a widely traded commodity segment,” said Ashok Mittal, CEO of Emkay Commotrade, a commodity broking firm.
NCDEX is currently working on the draft of contract specification, which will be ready in some time. According to an official, the exchange had approached FMC earlier with the proposal.
“During the past six years, FMC has taken many positive steps to tighten the loopholes. Hence, pulses will be one of the successful contracts unlike other re-launched contracts that failed to attract participation,” said Mittal.
India imports around three million tonnes of pulses annually from various parts of the world including Australia, Myanmar and other origins.
Other exchanges including MCX may follow suit.
