Commodity futures on a roll, volumes jump 200% in a year

KOCHI: The combined business volumes of commodity futures trading at the three national exchanges — NCDEX, MCX, NMCE — have touched Rs 11 lakh crore this year, showing a 200% rise over last year, according to L Mansingh, secretary, ministry of consumer affairs.

He said the growth in trading has been moving at a fast clip over the last two years. “There was a growth of 274% in commodity futures last year,” he said. At present, 102 commodities have been cleared for futures trading. The ministry is examining the possibility of allowing more products to be traded, he added.

Though the prices of various commodities have risen recently, volatility has come down and the ministry has not received any complaint of market manipulation in futures trading, he said referring to accusations from certain quarters that futures trading had influenced spot prices in the case of wheat and pulses.

“In fact, the near month contracts of wheat are now lower than spot prices,” said Mr Mansingh, who was here recently to attend the seventh trade and settlement committee meeting of the NMCE.

For the better participation of farmers in the commodity futures trading, the ministry is looking at making banks the market aggregators. In this capacity, the banks could play a bigger role like lending for futures trading.

He said the regional commodity exchanges (there are 21 of them in the country) will not be wound up. The ministry will lay down guidelines to make their trading more transparent. They will be allowed to trade in more commodities since most of them still stick to a particular commodity.

He said the issue of amendment to the FMC Act to grant autonomy to the Forward Markets Commission to transform it to a body like Sebi has been referred to Parliament.