NCDEX re-launches future contract in Coffee

Bangalore, Sep 10: Union Minister of State for Commerce Jairam Ramesh today strongly advocated setting up of a separate stock market for commodities to realise the international prices for Indian farmers on their produces.

Speaking after re-launching the Coffee Futures Contract in Coffee (Robusta Cherry AB variety) of the National Commodity and Derivatives Exchange Ltd (NCDEX) here, he said that the Forward Marketing Commission (FMC), intended to regulate the Commodity Stock Market would be established shortly once the Abhijith Singh Committee submit its report to the government.

Mr Ramesh said that there were initial apprehension against the idea of establishing Commodity Stock Market in the country fearing skyrocketing of prices of farm products. However such markets would help to stabalise the agriculture system to ensure better prices to the farming community. The Parliamentary Standing Committee on Agriculture has advocated to empower the proposed Forward Marketing Commission on Commodities to regulate the functioning of the Commodity Stock Market on the lines of Security Exchange Board of India (SEBI), he added.

He said that a Bill to establish FMC was before the Parliament and was expected to get passed in the current session itself. It would also confer statutory status to the Commodity Stock Market and the required laws and regulations would be in place by year end, he added.

Stating that the future trading in agricultural commodities was not new in the country, Mr Ramesh said that in the early days future trading were being done in Pepper and Cotton. "However, due to lack of proper infrastructure to promote such trading much benefits were not being derived" he added. Stressing that "Unless more and more number of growers took part in the process of Future Trading and Commodity stock trading the new system will not help the farmers". He appealed to the authorities to take precautionary measures against any volatility in trading, trading of unusual volume of trading and ensuring physical delivery of commodities in accordance with the contracts. "There is also need to ensure the involvement of primary participants in the trading" he added.

The Minister said that his Ministry has started E-auctioning of Tea, Cardamom and Rubber and Coffee would be added for e-trading next year. "The success of e-auctioning would depend upon the number of farmers involve in it as it was designed to benefit smallest farmers among the small" he added.

Referring to barring Banks and Mutual Funds from participating in the Future Trading, Mr Ramesh said that the decision was taken in the interest of consumers of farm products. "The Abhijit Singh Committee formed to recommend on the issue would look into it" he added. UNI