SEA plans multi-commodity futures

NEW DELHI, AUG 9: India's apex solvent extractors body is negotiating with Bombay Oils and Oilseeds Exchange BOOE to set up a national ...

NEW DELHI, AUG 9: India8217;s apex solvent extractors body is negotiating with Bombay Oils and Oilseeds Exchange BOOE to set up a national multi-commodity futures exchange for edible oils, industry sources said today.

The Solvent Extractors Association of India SEA and BOOE were expected to finalise plans on setting up of the futures before the end of this week, they said. SEA is holding talks with BOOE since it is a member of the pioneering oils and oilseed exchange in Mumbai.

BOOE runs a full-fledged domestic oilseeds exchange in Mumbai but its reach is limited. The oilseeds exchange had in May last launched an international futures exchange in castor oil.

When contacted, SEA officials refused to give details about the negotiations with BOOE. quot;You will get the details of our plans by August 15. All we would like to say is that we will coming up with firm plans for a multi-commodity futures exchange soon,quot; they said.

A fortnight ago, SEA president Ajay Tandon said the solvent extractors would be upwith the project to set up multi-commodity futures exchange in six months.

SEA executive director said the extractors planned to have the multi-commodity exchange on the lines of National Stock Exchange NSE and it would connect the width and breadth of the country through an on-line system.

SEA had on its own plan to set up a multi-commodity exchange with its headquarters at Mumbai. However, authorities of Forward Markets Commission FMC, the regulatory body of commodity markets in the country, said they had not received any proposal from SEA for the multi-commodity exchange in response to government8217;s invitations to associations and individual groups for setting up exchange in forward trading in the edible oil sector.

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quot;They SEA are members of BOOE,quot; they said. Industry sources said it was due to this reason that SEA was trying to work out an arrangement with BOOE to set up the national-level multi-commodity exchange.

They said had SEA made a proposal to the FMC that it would not have beenfeasible in view of BOOE already in existence in Mumbai. The SEA-BOOE talks could also cover utilising the oilseeds infrastructure in Mumbai by the solvent extractors for their proposed exchange.

As part of the talks, SEA was also demanding that more of its members be appointed to the BOOE board of directors. Efforts to set up futures exchange in edible oil sector have gained momentum after the Union cabinet cleared a food ministry proposal to allow forward trading in eight edible oils and their products.

Finance Minister Yashwant Sinha, in his 1998-99 budget speech, said government had decided to allow futures trading in edible oils in order to ensure that farmers get better returns and consumers did not suffer from price flare-up.