Pilot project launched in Gujarat
KOCHI: Work on a real-time price information system for agriculture produce throughout the country will be launched this financial year under the aegis of the Union Government and the Forward Markets Commission (FMC).
When the project is complete, all the major mandis (markets) and taluks have displays of real-time spot prices of various commodities throughout the country, said FMC chairman S. Sundaresan here on Friday.
He said that this is one of the steps being taken by the Commission to provide easy access to price information to farmers so that they could take advantage of the possibilities offered by commodity futures. The spot prices will come into consideration also in the final settlement in commodity exchanges across the country.
Mr. Sundaresan was delivering the keynote address at the `Mega Trade Meet' - a programme of interaction with the forward markets regulator - organised by India Pepper and Spice Trade Association (IPSTA).
The FMC has launched a pilot project in Gujarat and it has written to States like Kerala informing them of the efforts being made by it to put in place a real-time information system on agriculture commodity prices.
The FMC chief said that collection of real-time information and its dissemination was one of the major problems being faced by the regulator.
Mr. Sundaresan said the Forward Contract Amendment Bill 2006, introduced in Parliament on March 21, was aimed at giving the FMC an autonomous status. Once the Bill became a law, the Commission would have more teeth. It would be able to introduce new trading opportunities in areas like options and derivatives.
The Commission would also be then in a position to more closely monitor and regulate the operations of the intermediaries, he said.
Year of consolidation
Mr. Sundaresan said the coming financial year would be a period of changes in the commodities futures market after a year of consolidation during the current financial year.
Till March 15 this fiscal, commodities futures trading grew 350 per cent vis-à-vis last year to touch a trading volume of Rs.19.5 lakh crores (approximately $420 billion). During 2004-05, the volume stood at Rs.5.71 lakh crores.
P.H. Ravikumar, Managing Director, National Commodities and Derivatives Exchange (NCDEX), said the new Warehousing Bill introduced in Parliament would allow warehousing receipts to be used as negotiable instruments.
The Exchange had, for the first time in the country, procured paddy from 26,000 farmers in Madhya Pradesh on a pilot basis.
Similar project in Orissa
A similar project, this time involving about a lakh farmers, is being planned in Orissa, he said.
Mahendra L. Parekh, president, IPSTA, welcomed the gathering. Spices Board Chairman C.J. Jose and Poonam Gupta, vice-president, National Multi-Commodity Exchange of India, offered felicitations.