Financial Daily from THE HINDU group of publications
Tuesday, Aug 27, 2002
Financial Daily from THE HINDU group of publications Tuesday, Aug 27, 2002 |
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Agri-Biz & Commodities
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Commodity Exchanges Govt to go slow in opening up farm commodity trade Our Bureau
MUMBAI, Aug. 26 LIBERALISATION of trade in agriculture commodities will essentially be a slow process primarily as the Government needs to protect the interests of domestic producers, Mr. Sharad Yadav, Minister for Consumer Affairs, Food and Public Distribution, said on Monday. "The challenge before the Government today is to balance the interests of producers, processors and consumers. Therefore, we have to be cautious in liberalising the commodity markets,'' Mr Yadav told delegates to the Second All-India Conference of Commodity Exchanges in India here. He conceded that some commodity exchanges that have been allowed to conduct futures trading have not been able to improve trading volumes. "The small volume of trading itself works as a vicious constraint and prevents investment in reform measures such as online trading and computerisation. However, associations have to pool their resources to implement such reforms, not only in the context of emerging opportunities in this sector but also in the face of major global changes in the area,'' Mr Yadav said. He said modernisation of the commodity exchanges was critical since the Government proposes to open up for futures trading many commodities in which such trade is currently prohibited. At the same time, non-performing exchanges should close down, he added. In the context of WTO, it was imperative to strengthen domestic markets, he said. On the setting up of the National Multi-Commodity Futures Exchange, Mr. Yadav said the Standing Committee under his Ministry had cleared the proposal. It will be taken up in the winter session of the Parliament. "Three or four entities have been short-listed for the exchange'', Mr. S. Bandopadhyay, Secretary, Department of Consumer Affairs, said. "We want to verify the financial ability of these entities before they are entrusted with the responsibility of running the multi-commodity exchange,'' he said. According to Mr. A.K. Bhatt, Chairman, Forward Markets Commission (FMC), the existing exchanges "will have to stand in competition to large automated multi-commodity exchanges which are on the anwil.'' Mr Yadav said the Central Warehousing Corporation (CWC) Act would be amended in a manner that will enable financing against warehouse receipts. Responding to a suggestion put forward by BJP leader Mr. Gopinath Munde, he said his Ministry had put forward a proposal to set up a buffer stock of 20 lakh tonnes for sugar.
Rabi prospects normal: Yadav RECENT bout of rains across the country has lead to an improvement in water and fodder availability situation, Mr Sharad Yadav, Minister for Consumer Affairs, Food and Public Distribution, said. He said the Crisis Management Group set up under the chairmanship of Deputy Prime Minister, Mr. L.K. Advani, was awaiting reports from various State Governments on the drought situation. The Group had held two sittings so far. "While kharif production might be impacted, rabi prospects should be normal,'' he said.
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