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Friday, Jan 11, 2002

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Corporate - Alliances & Joint Ventures ties up with MDEX -- MoU to develop futures exchange

Kohinoor Mandal

KOLKATA, Jan. 10

THE sugar industry's most visible Web site,, promoted by the Mumbai-based e-commodities Ltd, has joined hands with Malaysia Derivatives Exchange Bhd (MDEX) for developing its sugar futures exchange.

Last December, and MDEX signed a Memorandum of Understanding (MoU), under which the latter has agreed to extend all help to the former in creating the Indian sugar futures exchange.

Mr Paritosh Joshi, Director-Marketing of, said it was a broad scale arrangement and in future there was a possibility of cross-trading between the two exchanges.

``For the time being, MDEX will give us the technology and will train our employees and customers. Moreover, they will also help us in net management, formulating the rules, laws and bye-laws of the exchange, in creating a surveillance system and a clearing house,'' Mr Joshi told Business Line.

MDEX is an integrated exchange in Malaysia for futures trading in commodities, derivatives and interest rates. MDEX was created on June 11, 2001, with the merger of Commodity and Monetary Exchange Malaysia and Kuala Lumpur Options Futures and Forward Exchange.

Four products are currently being traded in MDEX. They are crude palm oil, Kuala Lumpur Stock Exchange Composite Index Futures, Kuala Lumpur Stock Exchange Index Options and 3-Month Kuala Lumpur Interbank Offered Rate (KLibor) interest rate futures.

In e-commodities Ltd, more than 10 leading Indian sugar companies hold stake. Among the list of promoters are Balrampur Chini, EID Parry, Bannari Amman, Dhampur Sugar, Thiru Arooran Sugars and DCM Shriram.

However, all these companies hold stakes less than 10 per cent each and they together produce more than a fifth of the country's total sugar output. has recently introduced online cash trading. According to Mr Joshi, in the last four months more than 2.5 lakh tonnes of sugar have been traded through this system creating a total turnover of Rs 45 crore.

The company is also interested in introducing futures trade in foodgrains, whenever the Union Government liberates that sector.

Recently, the Government had given license to to set up a sugar futures exchange along with e-sugar India and the Hyderabad-based NCS Infotech.

Explaining the other facets of the agreement, Mr Joshi said, ``India is one of the largest importer of palm oil and MDEX is an important palm oil exchange. So, in tying up with us, MDEX will get an exposure in the Indian market. Moreover, sugar production in Malaysia is low and MDEX can gain in having an exposure in the Indian sugar market,'' he said.

He added that, in future, contracts of the any of the two exchanges could be traded on the other exchange.

At present, different exchanges all over the world have such arrangements.

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