Trade bodies stand for futures trading

MUMBAI: Representatives of trade and manufacturers’ associations, chambers of commerce and various commodity boards that met with the Forward Markets Commission (FMC) in Mumbai on Wednesday, are in favour of commodity futures trading, despite the controversy on rising prices of essential commodities.

Representatives of Associated Chambers of Commerce and Industry of India (Assocham), Federation of Indian Chambers of Commerce and Industry (Ficci), Indian Merchants Chambers (IMC), the Agricultural and Processed Food Products Export Development Authority (APEDA), Tea Board, Coconut Development Board, Bombay Bullion Association, associations of mentha oil, pulses, guar, gum, soyabean and various associations dealing in oilseeds attended the meeting.

The objective of the meeting was to let these bodies share their perspectives of the market with senior officers of the FMC and also give their views on the policy environment.

Speaking to the media, chairman, S Sundareshan, FMC, said, “Reservations were raised only on narrow commodities, where production does not match the demand.”

He further added that the trade bodies were wary that the commodity futures market was “not a perfect market”. While they were not keen on banning trade in these narrow commodities, they suggested that temporary suspension could be considered. This is true in cases of commodities like sugar that has extensive government intervention.

Mr Sundareshan highlighted the two vital initiatives taken by the FMC to expand participation in commodity futures markets, of conducting awareness programmes and holding training programmes for various segments of the market.
In ’05 the FMC conducted 42 such programmes throughout the country, covering around 8,000 participants in all, and in ’06 it has already organised 15 programmes.

The rapid growth of the futures market in the last three years has resulted in increased manpower requirements for this sector. The FMC has taken up the matter of inclusion of the commodity futures market in the curriculum of premier management institutes and universities.