Trading comes to a halt at esugarindia

Shishir Bajaj-promoted esugarindia, India's first online sugar futures exchange (SFX), is struggling to get a hit as all its five members, mainly traders from Mumbai, have switched to national commodity exchanges.

At the time of its launch in July 2003, the chairman and managing director of Bajaj Hindusthan, Shishir Bajaj, had said that the exchange was getting 7000 hits daily and, therefore, had good potential for online sugar trade in the country.

The turnover and volume on esugarindia has declined to 'nil' with no trade reported since February this year, according to data collected from the website of Forward Markets Commission (FMC). The data showed that the exchange had attracted a handsome fortnightly turnover of Rs 1.5 crore around the same time last year.

The exchange recorded a turnover of Rs 1.37 crore during the fortnight between January 2 and 14, 2006, and Rs 1.26 crore during the period between April 1 and 15, 2005.

"This was the period when the spot price of sugar was ruling high due to scarcity of supply in the wake of lower production in India," said an exchange official.

The official, however, blamed abundance of availability due to higher production for the lack of traders' interest in futures trade. But when asked about the attractive volume on the National Commodity &

Derivatives Exchange (NCDEX), the official said that traders must have found national exchanges as more trustworthy and transparent than regional exchanges. Established in partnership with cooperative sugar mills in Maharashtra, for sugar futures of M30 at Delhi and S30 at Vashi delivery, the exchange had looked to add members into its portfolio by conducting workshops and seminars in the trading hubs of remote Maharashtra and other parts of the country. But the exchange is doing no such activities now. Neither has it applied to the Forward Markets Commission for the launch of any fresh commodities on this platform, the official added. Currently, though esugarindia is offering sugar futures for May delivery, none of the listed members, presently four, are taking part on this platform. SFX was earlier conducting trading on its sugar physical exchange and claimed to have about 140 trading members, comprising 30 sugar mills and 110 brokers, commission agents and traders. But members switched to national exchanges where more number of commodities are offered for trade. On the NCDEX, M30 contracts for the near month and far months delivery are cloaking good volume and turnover. Of late, S30 has also been witnessed some volume. Experts believe that fundamentals have nothing to do with trade in spot and futures. Traders are attracted to exchanges on the basis of trade practices and not on commodity fundamentals, they said.