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KOCHI, April 29

INFLUENCED by the success of futures trading in coconut oil, the First Commodity Exchange of India (FCEI) is now on the job to commence futures trading in copra.

FCEI has already got the permission to do futures trading in copra also and ``we are now working on this seriously and if every thing goes well in six months time trading in copra will be commenced'', Mr Rambahadur Singh, President, and Mr N Ananthan, Chief Executive of FCEI, said.

Since the commencement of futures trading in coconut oil (on October 29), there has been a revival in the coconut oil market. The prices, which were below Rs 3,000 a quintal in October 2001, have shown an upward trend since then and the prices of coconut oil both ready and futures never dropped below Rs 3,000 a quintal. In fact, on December 11, it went up to Rs 4,400 and from January 2002 onwards it fluctuated between Rs 3,500 and Rs 3,800 a quintal.

With the introduction of futures trading there had emerged a price discovery mechanism which had resulted in arresting the selling pressure hither to prevalent in the market, they said.

On Monday, future contracts for May, June and July were Rs 4,130, Rs 4375 and Rs 4,475 respectively. There is a steady local demand despite little demand from upcountry. Besides, it has led to a revival in the copra milling sector. In fact, following the drop in demand for coconut oil and the consequent price fall, majority of the mills had closed.

As a result, the number of mills fell to 400 now from over 2,000 in 1980. However, the coconut oil futures trading has renewed confidence in the milling sector.

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