First Commodities Exchange of India to launch the venture
KOCHI: The futures trading in copra, to be launched by the Kochi-based First Commodities Exchange of India (FCEI), will provide a new avenue to the traders. It will be of immense help not only to the traders but also to the coconut farmers, according to the FCEI.
The FCEI is a public limited company jointly promoted by Cochin Oil Merchants' Association and First Commodities Clearing Corporation of India, and regulated by Forward Market Commission. It was started in 2001.
The FCEI is already engaged in the coconut oil futures trade.
A remunerative price to the farmer was always the top priority of the Government, but its market intervention schemes through minimum support price (MSP) could not bring the desired result, said a top official of FCEI, while explaining the need for futures trading.
100 items traded
After liberalisation, it has become necessary for the Indian farming community to plan their farming and marketing prudently like their counterparts in other countries, he said. Proper systems for price discovery and risk management assume importance in this context.
In 2001, the Government relinquished the conventional system and introduced the futures system, covering all commodities. At present, about 100 items are traded in 24 exchanges throughout the country, he said.
Kochi has been the centre of coconut and spices trade in India for several centuries.
Even from pre-Independence days, coconut oil was exported from India to various countries. Cochin Oil Merchants Association (COMA) has been involved in the trade for many decades.
FCEI has electronics platform for online trading.
The exchange has its own Trade Guarantee Fund for guaranteed settlement. The exchange is also planning to introduce rubber futures trading.