NCDEX looks at futures trading in sugar

With the ban on futures trading in sugar 'lapsing,' the National Commodity and Derivatives Exchange Ltd has sought permission to trade it,a top official said today.

With the ban on futures trading in sugar ‘lapsing,’ the National Commodity and Derivatives Exchange Ltd has sought permission to trade it,a top official said today.

NCDEX MD and CEO,R Ramaseshan told reporters here that the ban issued in May 2009 was valid till September this year and had lapsed thereafter.

”There is a possibility that sugar can be traded now. We have filed permission papers (to trade sugar) with the Forward Markets Commission (the regulatory authority),” he said.

The ban was imposed last May following steep increase in prices of sugar and with the country requiring to import it. Responding to reporters’ queries on the Warehousing Development and Regulation Act,he said that the Warehousing Development Authority had been constituted recently and expressed confidence that it would come out with its guidelines on regulation in a year or two.

”There are better chances that the Act will become a reality soon,” Ramaseshan said.

On funding for the NCDEX,he said it had met the Government of India guidelines of networth of Rs 100 crore but said it was still short of the equity capital of Rs 50 crore,to meet the stipulations for which it was taking to steps like rights issue.

”We have completed one round of rights issue raising Rs 37.50 crore and are in the process of evaluating to reach the Rs 50 crore mark by the month end,” he added.

Story continues below this ad

On IPO,he said that ”this is not the apt time,” though there was no ban on coming out with public issue.

To a query on prices,he said that NCDEX was only an ”electronic forum for buyer and seller” and said ”we have no views on prices.”

The demand,supply and the bargaining power of those involved mattered,he said.

Detailing the business growth of NCDEX,Chief Business Officer Vijay Kumar said that factors including decontrol of crude oil has resulted in it registering Average Daily Trading Volume (ADTV) of Rs 277 crore in September 2010,from Rs 6.57 crore in April this year.

Story continues below this ad

”As more fuel groups free themselves from the yoke of administered prices,we can expect more volumes in our future crude contract,” he said.

Other than agricultural commodities,the increase in ADTV has been contributed by crude and steel oil contracts,he said adding the total trade valued so far in 2010-11 was more than Rs five lakh crore,above th Rs 3.87 lakh crore in the same time last year (ie from April one to September 15).

Ramaseshan said NCDEX was focussing on non-agricultural commodities as part of diversification.