NMCE re-vitalizes copra futures trading

Kochi, Mar 9 (UNI) The National Multi-Commodity Exchange (NMCE) of India today re-launched the copra futures trading in a bid to bring in fair price discovery and greater transparency into the trading of copra and coconut oil.

Making the 'inaugural trade' at a function here, Coconut Development Board chairperson Minnie Mathew said the price volatility in coconut oil during the past ten years was a matter of great concern.

Describing the fluctuation in the coconut oil prices as akin to a game of ''snakes and ladders'', Ms Mathew said that the prices, which had touched a historic high of Rs 7,500 per quintal in January, 2005, had slid 30 per cent to Rs 4,800 per quintal by December, 2005.

''The current system of deriving value/price for copra from coconut prices is not conducive to a market driven price discovery mechanism, and is symbolic of the relatively poor bargaining position of coconut farmers and copra converts,'' she said.

Stating that market intervention by the government in the form of a minimum support price of Rs 3,590 per quintal, announced in August, 2005, had not helped to maintain a good price for copra, Ms Mathew hoped that the futures trading system would ensure better price discovery, greater transparency and price stabilization, which would ultimately benefit the coconut farmers.

She said that a study done by IIM, Bangalore, for the Coconut Development Board on 'ailments and remedies' for the sector, had recommended online trading of copra as a major method to bring farmers into the trading loop.

Describing coconut as a ''neglected crop'', Ms Mathew said measures were needed to improve the irrigation and plant protection facilities in coconut gardens, which were typically small holdings of less than 50 cents each.

The Coconut Development Board was planning to launch market literacy programmes, with the help of cooperative societies, for coconut farmers to help collect marketable surplus and quality control measures.

Mr Kailash Gupta, Managing Director, NMCE, said that this was the third time that copra futures trading was being launched, as the earlier efforts in 2002 and 2004 had not yielded much results.

The NMCE copra futures trading would provide a single electronic board for price display besides ensuring a fair and efficient clearing and delivery system in collaboration with the Central Warehousing Corporation.

Citing market-driven rubber prices as an example, Mr Gupta hoped that a strong market in copra would significantly influence coconut oil prices also.

Others present at the function included Spices Board chairman C J Jose and Futures Marketing Commission director P K Singhal.

UNI ARC DK1314