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Pratim Ranjan Bose

Kolkata , April 22

IN order to make its crude futures trading popular, Multi Commodity Exchange of India Ltd (MCX) is planning to introduce futures trading in petroleum products, possibly in the current year.

Big oil refiners, who are yet to participate in MCX crude futures, are believed to have mooted this proposal.

"We are considering the issue and are in discussion with the oil companies which are also the members of our product development board," Mr Joseph Massey, Deputy Managing Director of MCX, told Business Line.

MCX is in the process of identifying the petro-product basket which will figure in futures trading at a later date.

Mr Massey said that MCX was looking forward to stabilising the crude futures further before taking up new projects.

Currently trading in four lakh barrels a day with an identical open interest position, MCX expects the average daily volume to touch the 10-lakh barrel mark in the next few months. The average daily turnover, which is now ruling between Rs 70 crore and Rs 100 crore, is expected to go beyond Rs 200 crore.

"Ideally speaking, trading in generic products should be popular before we branch out to downstream energy products.

Having launched crude futures in February 9 , we have registered reasonable growth in trading volumes so far. However, we should give it some more time to grow before initiating any new venture," he said.

Mr G.P. Agarwal, General Manager (international trade) of Indian Oil, on the other hand, feels "MCX has to launch futures on petroleum products to pave way for the entry of the bigger players in the crude futures market". Mr Agarwal is a member of the product development board of MCX.

"The oil refining industry would prefer a two lane entry to sufficiently hedge the volatility in crude prices," he said, explaining the reasons behind the lukewarm response from the big companies towards crude futures so far.

He, however, added that industry was still on a learning curve insofar as participation in futures trading was concerned and was likely to take an increasing interest in the issue.

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MCX to launch futures trading in petro products

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