Financial Daily from THE HINDU group of publications
Friday, Feb 08, 2002
Agri-Biz & Commodities
ISEC to pick up stake in sugartrade.com
KOLKATA, Feb. 7
THE Indian Sugar and General Industry Export Import Corp oration Ltd (ISEC) has decided to pick up an equity stake of more than 10 per cent in sugartrade.com, one of the three exchanges licensed by the Union Government for sugar futures.
Mr Paritosh Joshi, Director-Marketing of sugartrade.com, said ISEC took a decision after going through the detailed presentations made by all the three exchanges. The other two are e-sugar India and Hyderabad-based NCS Infotech.
``We have just received the formal nod from ISEC. The written support along with the decision to pick up equity stake will come soon. This is a major boost for us to become the most important nodal point for the country's sugar trading market'', Mr Joshi told Business Line from Mumbai.
Sugartrade.com is promoted by the Mumbai-based e-commodities Ltd. Leading companies as Balrampur Chini, EID Parry, Bannari Amman, Dhampur Sugar, Thiru Arooran Sugars and DCM Shriram are among other its stake-holders. These companies together produce more than a fifth of the country's total sugar output.
With ISEC joining sugartrade.com as an equity holder, the Web site gets the formal support of both the corporate and the cooperative sectors because ISEC is owned equally by the Indian Sugar Mills Association and the National Federation of Co-operative Sugar Factories Ltd.
Some time back, ISEC itself was contemplating developing its own futures sugar exchange but the Forward Markets Commission did not support it. Since then, ISEC was contemplating to find a way for playing a proactive role in the development of sugar futures in India.
``ISEC invited submissions from the three licensed agencies in December and a formal presentation was made in January by all the three'', Mr Joshi said.
Meanwhile, sugartrade.com has also formalised its broad-scale arrangement with the Malaysia Derivatives Exchange Bhd (MDEX) for developing the nitty gritties of the exchange. The MoU with the Malaysian body was signed in last December.
``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'', he said.
MDEX is an integrated exchange for futures trading in commodities, derivatives and interest rates. MDEX was created in June 11, 2001, with the merger of Commodity and Monetary Exchange Malaysia and Kuala Lumpur Options Futures and Forward Exchange.
Four products, namely 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, are being traded there.
Sugartrade.com has introduced online cash trading. In the last four months more than 2.5 lakh tonnes of sugar has been trade through it for a total turnover of Rs 45 crore. ``We are targeting physical sales of around Rs 20-25 crore every month'', he said.
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