FMC chief rules out closure of regional commexes
The Centre and the Forward Markets Commission (FMC) do not have any intention to close down regional commodity exchanges, unlike what is happening in the stock exchanges.
By TNN |
AHMEDABAD: The Centre and the Forward Markets Commission (FMC) do not have any intention to close down regional commodity exchanges, unlike what is happening in the stock exchanges.
“In fact, we want the regional exchanges to evolve through demutualisation, on-line trading and other changes so as to give a run for their money to the three national commodity exchanges,” said S Sundareshan, chairman of the Forward Markets Commission.
With four functional commodity exchanges, Gujarat has the highest number of exchanges in the country. “The largest number of participants in the commodities markets are either from Gujarat or Gujaratis based across the country.
So, the community has a major role to play in the future development of the commodity markets in India,” Mr Sundareshan added. He was speaking at the golden jubilee celebration of the Ahmedabad Commodity Exchange here on Sunday.
The trading volumes on the Indian commodity exchanges in 2006-07 at an estimated $750 billion will be more than India’s gross domestic product (GDP). “In three years time, the number of commodities being traded on Indian commodity exchanges are more than those traded on any exchange in the US, Europe or China,” the FMC chief said.
FMC will soon come out with guidelines on the issue of ownership in commodity exchanges, including the stake that can be offered to foreign investors. The regulator has already recommended to the government that domestic banks and MFs as well as FIIs be allowed to trade in bullion, metal and crude oil in the first phase.
There is a common view amongst many that futures trading in commodity exchanges has benefited a few traders only, while the farmers as well as consumers of the country are losing. “But, take the case of the wheat scenario recently.
Due to the availability of futures prices, the farmers did not sell at the minimum support price (MSP) to the government. Instead they waited for prices to go up and sold at much higher prices to private parties,” Mr Sundareshan said.
“In fact, we want the regional exchanges to evolve through demutualisation, on-line trading and other changes so as to give a run for their money to the three national commodity exchanges,” said S Sundareshan, chairman of the Forward Markets Commission.
With four functional commodity exchanges, Gujarat has the highest number of exchanges in the country. “The largest number of participants in the commodities markets are either from Gujarat or Gujaratis based across the country.
So, the community has a major role to play in the future development of the commodity markets in India,” Mr Sundareshan added. He was speaking at the golden jubilee celebration of the Ahmedabad Commodity Exchange here on Sunday.
The trading volumes on the Indian commodity exchanges in 2006-07 at an estimated $750 billion will be more than India’s gross domestic product (GDP). “In three years time, the number of commodities being traded on Indian commodity exchanges are more than those traded on any exchange in the US, Europe or China,” the FMC chief said.
FMC will soon come out with guidelines on the issue of ownership in commodity exchanges, including the stake that can be offered to foreign investors. The regulator has already recommended to the government that domestic banks and MFs as well as FIIs be allowed to trade in bullion, metal and crude oil in the first phase.
ADVERTISEMENT
There is a common view amongst many that futures trading in commodity exchanges has benefited a few traders only, while the farmers as well as consumers of the country are losing. “But, take the case of the wheat scenario recently.
Due to the availability of futures prices, the farmers did not sell at the minimum support price (MSP) to the government. Instead they waited for prices to go up and sold at much higher prices to private parties,” Mr Sundareshan said.
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
