Kochi: Commodity markets regulator Forward Markets Commission (FMC) has scheduled a meeting next month to discuss the future of the 21 regional commodity exchanges across the country that have nearly become defunct in wake of the emergence of multi-commodity exchanges. No date had been set for the meeting at press time.
B.C. Khatua, FMC chairman, who was in Kochi on Friday in connection with the launch of Federal Bank Ltd’s scheme for financing warehouse receipts, said that all the exchanges had been informed, and told to look at ways that could revive their activities.
All 21 bourses were single commodity exchanges, such as the India Pepper and Spice Trade Association (Ipsta)—the oldest among them—located in Mattancherry, Kochi, which is engaged in futures trading in pepper, and the First Commodities Exchange of India (FCEI), which trades in coconut oil.
Khatua said it was not proper to disband these exchanges because of increased competition due to the entry of national multi-commodity ones in 2003. On the contrary, some of these exchanges could look at taking up related commodities, he said, such as FCEI, which could also take up futures trade in other edible oils.
There was scope for additional players in the commodities futures market because the three top players—Multi Commodity Exchange of India Ltd (MCX) was mainly into non-agri commodities, National Commodity and Derivatives Exchange Ltd (NCDEX) into agri-commodities and National Multi-Commodity Exchange of India Ltd (NMCE) placing an emphasis on agri-commodities, but with a Kerala focus. In such a scenario, there was scope for regional exchanges to look at ways to stay in the market, Khatua added.
Despite a 7% decline in volume in futures trade compared with the first four months of fiscal 2007-08, mainly on account of the ban on futures trade in wheat and pulses—tur and urad—the fall was not that significant, he said.