Soon, traders in India could play in the global agri futures market. India's commodity exchanges have asked the market regulator, Forward Market Commission, to permit evening trading in internationally linked agri commodities.
Exchanges have told FMC that allowing global futures in agri futures will help traders benefit immensely. They said this will also help in restricting the parallel trade takes place once the domestic market get closed especially in commodities like edible oil complex.
At present, evening trading is allowed in coffee but there are several other commodities, like edible oil complex, sugar, cotton and maize, where the industry feels that evening trading should be introduced.
According to FMC member Kewal Ram, the regulator is not against opening the agri commodities for evening trade but it is waiting for the right time when these commodities can be globally integrated.
He said FMC had allowed evening trade in some agri commodities but there were complaints from traders that they were under pressure in night trading that was dominated by speculators. He pointed out that evening trade in coffee was allowed as around 70-80 per cent of the commodity was exported.
An Indore-based edible oil body official said evening trading was stopped at the behest of regional exchange NBOT whose volumes were affected.
Solvent Extractors' Association of India executive director B V Mehta said evening trade will provide a better price discovery mechanism in addition to liquidity.
The Association has already sent a letter to FMC saying when the evening session is available for soya complex, the solvent extractors units are able to manage risk far more effectively.
