India commodities futures trade seen up 40%

India commodities futures trade seen up 40%
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First Published: Tue, Sep 09 2008. 05 40 PM IST
Updated: Tue, Sep 09 2008. 05 40 PM IST
Mumbai: “India’s commodity futures trade is set to grow more than 40% to Rs57 trillion in the year to March 2009, despite trading curbs on eight commodities,”said the chairman of the Forward Markets Commission.
“I see the growth to continue above 40% in the financial year 2008-09 even after the extension of suspension and absence of certain commodities,” B.C Khatua, the head of the commodities regulator said in an interview.
In May, India suspended futures trading in soyoil, rubber, potato and chickpea for four months to tame galloping food prices. The suspension was scheduled to lapse on Saturday, but was extended till 30 November late on Friday.
Earlier in 2007, India banned futures trade in rice, wheat, and two varieties of pulses for their role in stoking inflation.
“It’s a temporary setback? everyone knows futures market is not responsible for spot price hike, things will fall in place market participants should not worry.”
“I expect a resumption of futures trade in all the eight commodities by mid of December,” he said.
India allowed futures trading in commodities in 2003 and the turnover at 22 Indian exchanges rose 10.58% from the year ago to Rs40.66 trillion in 2007-08.
“Traders have switched from the banned items to other related commodities and bourses have successfully launched a few new commodities to fill the void,” analysts said.
“With trade in rupee futures commodity players will benefit. Exporters, importers and traders of commodities can cover their currency fluctuation risk better,” he said.
The National Stock Exchange (NSE) of India started exchange-traded currency futures on 29 August, while others including the biggest commodity exchange, Multi-Commodity Exchange of India, plan to enter the fray soon.
The regulator said: “It is considering national-level status for Ahmedabad Commodity Exchange, majority-owned by the Kotak Group. India at present has three national level bourses.”
Global finance majors Citigroup, Merrill Lynch and Goldman Sachs, besides bourses like Intercontinental Exchange Inc and NYSE Euronext hold stakes in Indian commodity exchanges.
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First Published: Tue, Sep 09 2008. 05 40 PM IST