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Latha Venkatraman

As for bullion futures, FMC is awaiting the outcome of the three-member sub-group appointed by RBI to study its financial viability.

MUMBAI, Jan. 6

ENTHUSIASM for futures trade does not seem to have flagged despite low volumes dogging most of the commodity exchanges.

Following the Government's go-ahead for tea futures, the Forward Markets Commission (FMC) has received seven applications for tea futures.

These organisations include East India Jute and Hessian Exchange, Kolkata; Bombay Commodity Exchange; First Commodity Clearing Corporation India Ltd (FCCCI), Kochi; United Planters' Association of South India (UPASI), Coonoor; ACE Castor Future.com, Ahmedabad; Tea Auction, Kolkata; Thaumatargix Internet Services, Mumbai.

``We will be inviting these organisations shortly to make presentations to FMC,'' Mr Anand Kumar Bhatt, Chairman, FMC, said.

According to Mr Bhatt, FMC has laid down certain criteria for short-listing the exchanges for tea futures. ``We are stressing on online system from day one, at least for the larger exchanges,'' he said. ``Otherwise, organisations should have a trade guarantee system, clearing system, demutualisation and mark to market margin in place,'' Mr Bhatt adding that financial viability will be the most important criteria for granting approval for futures trade.

As for bullion futures, FMC is awaiting the outcome of the three-member sub-group appointed by the Reserve Bank of India (RBI) to study the financial viability of going into bullion futures. ``The report is said to be ready and RBI should release the report in a week's time,'' Mr Bhatt said.

The sub-group had two members from RBI and one from FMC.

According to Mr Bhatt, futures trade in bullion, by the nature of the commodity, requires approval from the Union Cabinet.

Futures trade in sugar is slated to commence from October 2002. The three organisations granted approval have been given 10 months to commence sugar futures.

The Spice and Turmeric Exchange at Sangli has also been accorded approval to resume turmeric futures after a gap of several years.

However, FMC is conscious of the problems facing commodity futures. ``We have asked exchanges to go online to boost volumes,'' Mr Bhatt said.

Despite its infrastructure, BCE has not been able to drive up volumes. BCE has commenced online trade in some commodities to push up volumes.

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