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Mr B.C. Khatua

Our Bureau

Mumbai, Nov. 8 In a bid to boost volumes on various national commodity exchanges, the commodity markets regulator Forward Markets Commission is considering changing the definition of near-month period to 15-20 days from the current 30 days.

For instance, the open interest limit of soyabean contract in the far month is 6,000 lots (1 lot is 10 tonnes) for members and 2,000 lots for clients. However, when it comes to near-month, members have to reduce it to 1,800 lots and clients’ 600 lots.

By changing the definition of near-month to 15-20 days, FMC intends members to hold 6,000 lots of soyabean contract for longer. Similarly, clients can have an open interest of 2,000 lots for 15-20 days more, said Mr B.C. Khatua, Chairman, FMC, at the function to launch trading of pulses in the National Spot Exchange (NSEL).

Expressing concern over the ban on futures trading in four agriculture commodities, Mr Khatua said the ban had tested the viability of the two national exchanges out of the three currently in operation.

“I am confident that the banned commodities will be available for trading after the deadline expires on November 30,” he said.

Though it is not possible to rope in 120 million farmers to participate in the futures trading, the exchanges should try and see to that farmers are benefited from the price signal emanating from the futures exchanges, he said.

Mr Anjani Sinha, Managing Director, NSEL, said the pulses contract will be of benefit to importers, millers, traders, physical market participants, corporates and government agencies such as MMTC, NAFED, STC and PEC which are engaged in import of pulses.

Pulses contracts of T+7 have been made available for trading. The contracts will result in compulsory delivery. The minimum lot size is 10 tonnes. The price of the contract will be made ex-warehouse Mumbai inclusive of import duty, mandi cess and exclusive of Sales Tax/VAT. The agriculture commodities will be traded between 10 am to 6 pm from Monday to Friday and from 10 am to 2 pm on Saturday. Non-agriculture commodities are available for trading from 10 am to 11.30 pm.

NSEL is a national level online trading platform for trading in agriculture and non agriculture commodities and currently offers spot trading in gold, gold mini, silver, cotton and now pulses contracts.

A memorandum of understanding was signed between NSEL and Pulses Importers Association of India. The association will benefit the members of PIA by providing online delivery based trading and a neutral and transparent platform for them to hedge their price risk against fluctuating prices.

Mr K.C. Bhartia, President, PIA, requested the exchange to set up a database on the production, consumption, price movement and export demand for pulses.

More Stories on : Commodity Exchanges | Regulatory Bodies & Rulings

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