COMA, IPSTA vie for futures

KOCHI, Apr 14: A curious situation has arisen in Mattancherry near Kochi with two organisations from the place staking claim before the...

KOCHI, Apr 14: A curious situation has arisen in Mattancherry near Kochi with two organisations from the place staking claim before the Forward Markets Commission FMC for the conduct of the futures trading in coconut oil.

The application by Cochin Oil Merchants Association COMA, one of them, is understandable as it had conducted futures trading in coconut oil under the auspices of FMC from 1956 till it was stopped in 1971. The general complaints of excessive speculation in futures trading in the country had triggered the decision.

But it is the claim made by India Pepper and Spice Trade Association IPSTA, the other organisation, for the same purpose that appears to have taken the trade circles by surprise.

IPSTA has been conducting a domestic pepper futures exchange since 1957 and for the last one-and-a-half years, it has been supervising the international pepper futures exchange also at the same place. That the international pepper exchange is yet to become fully functional is anotherstory.

Since the commodities are as different as chalk and cheese, it is feared, IPSTA will not be able to manage the coconut oil futures trading properly. But IPSTA president Sanjay J Mariwala justifies the decision saying that the organisation has hands-on experience on futures trading. In addition, it has the necessary infrastructure like trading hall, computers and a clearing exchange.

In contrast, he says, the COMA does not have sufficient infrastructural facilities. Yet another fact that works against COMA is its experience in futures trading was over 28 years ago. According to Mariwala, the FMC chairman, who visited Mattancherry recently, also felt it would be an advantage for a body which already has online trading facilities to conduct the futures trading in coconut oil.

IPSTA is waiting for an in principle sanction from FMC for the coconut oil futures exchange. 8220;We will then negotiate with COMA and submit a pucca proposal,8221; Mariwala adds. But COMA has a different story to tell. Its presidentP V Alexander and secretary N Ananthan while admitting that the present infrastructure is insufficient also point out that there is no dearth of funds and trading space for the association. Given such a situation, it is easy to set up online facility and any other necessary infrastructure, they argue.

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Moreover, the rates provide by COMA during its futures trading period had acceptance throughout the country.

The futures trading in coconut oil was then jointly conducted by COMA and Alleppey Oil Millers and Merchants Association, the former at Kochi and the latter at Alappuzha.

This time also the idea, according to them, is to submit a joint claim for the allocation of futures trading in coconut oil to these places. Another aspect to the issue is Alappuzha is also a premier copra trading centre.