The commodity futures market had witnessed a lot of uncertainties during the two year-period since January 2007 with major agri-commodities namely rice, urad, toor and wheat getting out of trading list. It was thought that futures trading resulted in an increase in prices of commodities in spot market. But even under the ban period these commodities witnessed significant rice in prices, according to R. Ramaseshan, Managing Director and CEO, NCDEX, a national level online commodity exchange.
Addressing presspersons here on Saturday, he said toor dhal price was around Rs. 30 a kg before it was banned for trading in futures. Only after the ban period it went up to Rs. 90 a kg.
Similarly the price of sugar, which was around Rs. 25 in September last year, went up by more than 40 per cent during the ban period, Mr. Ramaseshan said. It was only the gap between demand and supply created the rise in prices, he said.
With many agri-commodities back in trading list, NCDEX which is focussed on agri commodities, may witness a significant rise in turnover, he said. Mr. Ramaseshan said globally commodity futures markets were in existence for more than 100 years. The six-year old commodity futures market in India was at a nascent stage and it had to go a long way to attain maturity.
Referring to Tamil Nadu the CEO said “There is tremendous scope for trading of both agricultural and metal products, especially steel, in Tamil Nadu given the state’s rich commodity wealth.” NCDEX was working towards bringing in various participants in the value chain to hedge and trade on NCDEX platform, he said.
According to V. Vijay Kumar, Chief Business Officer, NCDEX was working to get more participants to trade in steel and the response was encouraging.
Trading on NCDEX futures platform would help farmers realise higher prices for their produce he said.
NCDEX is a leading commodity exchange in farm products and has around 850 members and a client base of over five lakh. It facilitates trading in 59 commodities out of which 39 are agri commodities. The daily volume is around Rs. 4,000 crore. The leading products traded are chana, guar seed, turmeric, pepper, jeera, soya oil and mustard seed.