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BCE moots linking of commodity exchanges

Sangita Shah

The Bombay Commodity Exchange has mooted a proposal of linking different commodity exchanges of the country to its current technology platform and is shortly expected to submit the proposal to commodity market regulator Forward Markets Commission, sources said.

The BCE move gains significance given the fact that most commodity exchanges are facing trouble in investing in technology to upgrade their trading systems from an open outcry system to a screen-based trading.

According to a concept paper prepared by BCE chief executive officer Anjani Sinha, BCE which has an in-principle clearance to trade in 21 commodities wants to move towards a common marketplace for all commodities trading.

"We are discussing the probability of such a tie-up with the Bangalore-based Coffee Futures Exchange India Ltd and Kochi-based India Pepper and Spice Trade Association," Sinha said.

Through these two exchanges which are fairly better-off than other exchanges in terms of technology and trading volumes, cross-exchange trading would facilitate the members to trade in various commodities on one platform.

FMC has been persuading the various commodity exchanges to implement screen-based trading at the earliest.

Given the poor volumes and poor revenues at most of these exchanges, it would become suicidal for them to incur huge costs on computerisation.

BCE is also looking into the possibility of having a common trading platform with the Rajkot and Ahmedabad exchanges to trade in castor seed futures. Currently, 20 exchanges around the country are permitted to trade in 38 commodities.

These commodities are groundnut, groundnut oil, groundnut oilcake, cottonseed, cottonseed oil, cottonseed oilcake, sesamum, sesamum oil, sesamum oilcake, copra/coconut, copra oil/coconut oil, copra /coconut oilcake, safflower, safflower oil, safflower oilcake, rapeseed/mustard seed, rapeseed oil /mustard oil, rapeseed oilcake/mustard seed oilcake, rice bran, rice bran oil, rice bran oilcake, sunflower seed, sunflower oil, sunflower oilcake, soya oil, soya oilcake, soyabean, domestic cotton (full-pressed, half-pressed or loose), raw cotton, staple fibre yarn, jute and jute goods (hessian and sacks and cloth and/or bags, twines and/or yarns manufactured by any of the mills and/or any other manufacturer of whatever nature made from jute, turmeric, pepper, gur, castor seed, coffee, castor oil and potato.

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