SEA signs MoU with MCX for oil futures

Solvent extractors' Association (SEA) of India and Multi Commodity Exchange (MCX) of India today entered into a memorandum of understanding (MOU) for promoting futures trading in country's Rs 27,000 crore oil and oil seeds complex.

MCX expects the futures market to touch Rs 2,70,000 crore, or ten times the size of the spot market.

The partnership will enable more than 800 members of SEA to deal on MCX in key commodity segments including oil & oilseeds futures of refined soybean oil, RBD palmolein, mustard, castor seed, castor oil among others.

Jignesh Shah, managing director of MCX, said, "Along with the BBA and BME alliances, the 800 member strong SEA association reinforces the tremendous faith reposed by commodities exchanges in our operations and capabilities."

Sandeep Bajoria, former president of SEA, pointed out, "Indian vegetable oil industry is growing rapidly and has become very vibrant with free import and export of vegetable oils, free export of oilseed and oil meal. The MoU will help promote future trading".

B V Mehta , executive director, SEA, stated, "We will be recommanding MCX as the trading platform for futures contracts in the oil and oilseeds complex to our members."

SEA members will be entitiled to MCX membership under regular norms. Shah pointed out that domestic edible oil market was volatile owing to crop shifts, uncertain monsoons, correlation with international prices, transportation and storage costs and frequent changes in duty structure. MCX would provide a national level platform for oil and oilseed traders to hedge their risks.

Kishore Tanna, director Jamndas Madhavji International Ltd., felt the alliance acknowledged the combined expertise of the signatories and would help build a liquid, nationwide futures market for oils and oilseeds.

The MCX advisory panel has SEA heavyweights like Sandeep Bajoria, B V Mehta, Parvez H. Kader, managing director of Liberty Oil Mills, Vithaldas G Udeshi, chairman of Jayant Agro Organics, Atul Chaturvedi, president of Adani Exports, B. Mallik of IVP, Kishore Tanna, director of Jamnadas Madhavji International, and P M Chheda, partner of Mulji Devshi & Co..