The Hindu Business Line : ‘Futures trading being made scapegoat for price rise in commodities’

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‘Futures trading being made scapegoat for price rise in commodities’

Shashi Ashiwal

Moving forward: Mr B.C. Khatua, Chairman, Forward Markets Commission (right), and Mr P.H. Ravikumar, Managing Director & CEO, NCDEX, at a press conference in Mumbai on Thursday. —

Our Bureau

Mumbai, April 10 Mr B.C. Khatua, Chairman, Forward Markets Commission, has said “futures trading has become a newfound scapegoat for price rise in commodities.”

Reacting to the manufacturers demand for a ban on steel futures trading to rein in spiralling prices, Mr Khatua said “India produces about 60 million tonnes of steel per annum, while exchanges trade just about 10-15 lakh tonnes. How can exchanges influence prices?”

He was speaking at the launch of certified emission reduction (CER) trading at the NCDEX on Thursday.

The FMC Chairman also suggested that the exchanges consider trading in chemicals and processed agriculture products, such as fruits and juices.

Referring to the recent ordnance providing autonomy to the FMC, Mr Khatua said though the ordnance had lapsed, certain changes would be incorporated in the FCRA Bill and represented to Parliament.

Coal Futures

NCDEX plans to launch futures trading in coal in the second half of 2008. “We are struck with our decision, on which variety of coal to trade in. Coal is mostly controlled by the Government and there is a need to broaden the market. Industry players want us to look at the higher grade, apart from demand for the imported varieties,” Mr P.H. Ravikumar, Managing Director, NCDEX said.

Speaking on the sidelines of the conference, Mr Ravikumar said the exchange is close to finalising 15-20 delivery centres for its proposed futures trading in gold coins slated for launch in two to three months. “Logistic still remains an issue. We will be tying up with banks and NBFCs for the delivery part,” he said. Efforts are also on to increase the number of delivery centres to about 50.

Carbon credits

Carbon credits or CER are generated by use of cleaner technologies, resulting in energy savings, said Mr Unupom Kausik, Chief Business Officer, NCDEX.

Of the 978 projects that are registered under CDM, 332 are from India. Another 543 projects are in the pipeline at various stages of validation. By 2012, these projects are expected to yield around 400 million CERs valued about Rs 60,000 crore, he said.

On Thursday, CER on NCDEX logged a turnover of Rs 20 crore with about 1.9 lakh units traded. In the first session up to 5 pm, CER closed at Rs 1,013.80 before touching a day’s high of Rs 1,033 per unit.

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