New Delhi: Country’s first online sugar futures exchange -- Esugarindia, promoted by leading sugar producer Bajaj Hindusthan, has closed down after its derecognition by Forward Markets Commission for carrying on futures trading.
The Shishir Bajaj-promoted exchange was permitted to run for a period of five years till May 2007. As per the rules, the company should have sought the approval of commodity market regulator FMC for extending the licence.
However, as the company did not renew the licence, which was issued for a single commodity, FMC derecognised it from trading in sugar, a statement issued by the regulator said.
“Esugarindia is no longer an association recognised for forward trading in sugar,” FMC said.
When contacted, Himanshu Shah, who was heading the exchange, said: “We have to close it down as there was lack of participation and support from sugar traders.”
Bajaj Hindusthan had spent more than Rs3 crore in last five years in Esugarindia, he added.
Probably, traders feared to enter because the exchange was run by a company which has a large presence in the country, Shah said, adding that “this proved negative (for the bourse) as they thought that the exchange would be biased in trading activity”.
The sugar exchange, launched in 2003 with about 125 trading members, was generating a daily turnover of around Rs10 lakh initially. But, the earning began to dip gradually and trading came to a standstill in February 2007.