The Hindu Business Line : Within a couple of weeks of going live — Online commodity bourse registers high volumes

THE Ahmedabad-based Online Commodity Exchange of India Ltd (OCEIL), the country's first online multi-commodity exchange which went live on November 26, is already reporting daily trading in as many as nine commodities and touching volumes upwards of Rs 35 crore (Rs 35.78 crore from 525 futures contracts spanning seven commodities on Friday).

This is way ahead of the Ahmedabad Commodity Exchange Ltd (ACEL) whose daily volume is only around Rs 25 crore.

Mr Kailash R. Gupta, Managing Director, OCEIL, told Business Line that the exchange was radically different as it has looked beyond commodity traders while selecting its members. And his detractors point out that this very fact proves that OCEIL is a paper tiger without much grounding in reality, given that OCEIL claims to have drummed up a sizeable membership already but not many are known for their prowess in the commodities business.

``We have consciously cultivated a membership base where the traditional commodity trader has been kept out in favour of the stock exchange member well versed in screen-based trading. All the OCEIL members are also members of the National Stock Exchange (NSE). We have been able to put up the exchange in a span of only 10 months after getting the in-principle approval from the authorities last year. The official permission to begin trading in 24 commodities came in October this year,'' Mr Gupta said.

When asked about OCEIL's online trading infrastructure, Mr Gupta admitted that there were no daily trading monitors at the exchange in Ahmedabad and to that extent it is not easy to track the live trade at the exchange. As the OCEIL members are scattered across the country, the link is through a V-sat network, he added.

According to Mr Gupta, OCEIL has been promoted with a Rs 25-crore seed capital from five entities — Central Warehousing Corporation (CWC), Nafed, National Institute of Agriculture Marketing, Gujarat Agro Industries Corporation and Gujarat State Agriculture Marketing Board. Of this, Rs 10 crore is the equity portion with CWC pooling in 26 per cent and the other four aggregating 50 per cent with 24 per cent kept aside for agriculture produce marketing corporations of other States. Even the debt of Rs 15 crore has been contributed by the promoters, Mr Gupta said.

OCEIL got going even as the Ahmedabad Stock Exchange (ASE) still awaits the Securities and Exchange Board of India (SEBI) nod to commence its commodity futures trading activities. The ASE's proposed common trading platform with ACEL was being cited as road to salvation for the hapless bourse — the second oldest in the country after the Bombay Stock Exchange — seen to be on its last leg of action as its daily traded volumes began drying up drastically over the past few months.

The traditional commodity traders in this part of the country are still pooling their resources to begin trading on the ASE platform which is being procured at a cost of Rs 50 lakh. They hope to begin operations in a month's time once SEBI clearance comes through.

Meanwhile, OCEIL has begun generating daily reports of futures trading in commodities as diverse as rapeseed, castorseed, cottonseed oil and groundnut oil. It looks like the commodity traders have their task cut out in trying to hold to their own turf in this game called online futures trading.

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