The Hindu Business Line : MCX to focus specially on rubber, pepper futures

MULTI Commodity Exchange of India Ltd (MCX) has initiated steps to provide special focus on rubber and pepper so as to increase the futures trading in the exchange, according to Mr Jignesh Shah, Managing Director, MCX.

Currently, the exchange is trading only an "insignificant quantity" of rubber and pepper, and efforts are on to streamline the delivery system in these commodities, he told newspersons on Friday.

As part of restructuring the delivery mechanism, the exchange would soon shift its delivery centre to Kochi from Kottayam for futures trading in rubber and pepper. "Moreover, the number of delivery centres would be increased in Kerala."

Once a good delivery mechanism for rubber is provided, tyre manufacturers would definitely come forward in the trading through MCX, he said. Discussions are on with a few tyre companies in this regard.

According to him, the exchange would soon start accepting Central Warehousing Corporation (CWC) receipts for futures trading in rubber and pepper.

It would also arrange for funds from the banks for the traders by pledging CWC receipts.

"It would be an advantage for traders for futures trading as there are seven national banks in the exchange as promoters," Mr Shah said.

Referring to bullion trade, he said that close to 90 per cent of the futures trading in gold in the country takes place through MCX at the rate of 8,000 kg per day.

Currently, bullion trading is concentrated in Indore, Mumbai, Delhi and Rajkot. Kerala will become one of the top three players in gold trading within a year, he said.

In a short span of 11 months, the exchange has grown to the extent of recording daily turnover as high as Rs 1,470.31 crore (single-side, on November 5). The current average turnover is Rs 950 crore per day.

Mr Shah also said that the strength of MCX has been recognised in international forums.

It is the first exchange to have tied up with Tokyo Commodity Exchange (TOCOM). MCX has also tied up with Dubai Metals and Commodity Centre (DMCC) to set up an international gold and commodity exchange in Dubai.

It will be an international exchange and will commence operations in the second half of 2005, according to Mr Shah.

MCX is also the first commodity exchange in India to offer 16-hour trading session to bridge the timings of benchmark international markets such as Tokyo, Shanghai, London and New York. It has become the first exchange from India to surpass TOCOM in silver volumes, Mr Shah said.

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