Financial Daily from THE HINDU group of publications
Friday, Jun 14, 2002
Agri-Biz & Commodities
Roping in BSE, Apeda, SSI Tech -- BCE forms consortium to bid for multi-commodity futures
CHENNAI, June 13
THE Bombay Commodity Exchange (BCE) has formed a consortium with the Bombay Stock Exchange (BSE), Agricultural and Processed Food Products Export Development Authority (Apeda) and the Chennai-based SSI Technologies in a bid to set up the multi-commodity exchange.
The bid of the BCE-BSE-led consortium is among the 16 received by the Forward Markets Commission (FMC) for setting up the multi-commodity exchange. FMC is expected to decide on the bids soon. The entire process of selection is expected to be completed by August.
"All the members of the consortium are equal partners in this venture," a BCE official told Business Line. "The multi-commodity exchange will be Net-based."
While BCE is expected to offer its expertise in conducting futures trading, BSE would be extending its infrastructure. SSI Technologies will provide Web trading, while Apeda would lend its expertise in handling various agricultural products.
In particular, the consortium would try to tap the brokers registered with BSE for the Web trading. "We see a vast potential for commodity futures in the country. We also feel that these stock brokers have an important role to play," the official said.
FMC had invited applications for setting up of the multi-commodity exchange after a consortium comprising the National Stock Exchange, Mahindra and Mahindra, ICICI and Punjab Warehouse Corporation failed to get going even after receiving the Government's permission. The consortium's plan failed as the members could not come to an agreement on the location of the multi-commodity exchange's headquarters. The problem arose mainly since the Punjab Warehouse Corporation insisted that the exchange should function from the satellite town of Mohali.
Asked when the tea futures would be launched by BCE, the official said, "three months from now". "Almost everything is ready. Only the contract specifications have to be completed. We are discussing this with tea traders and associations," he said.
BCE, which went online recently, trades in 21 commodities, mainly oils-based. "The online trading is functioning satisfactorily. Our daily trade turnover ranges between Rs 1.5 crore and Rs 2 crore," the official said.
BCE has also entered into an agreement with the Kanpur Commodity Exchange to bring the latter on to its online trading platform.
"The modalities have not been worked out yet. While BCE members can trade in contracts on Kanpur exchange, the members there can do vice-versa," the official said.
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