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Kohinoor Mandal

Kolkata , Feb. 16

THE United Planters Association of Southern India (Upasi) has initiated a dialogue with the two leading multi-commodity exchanges - National Commodity and Derivatives Exchange (NCDEX) and Multi-Commodity Exchange (MCX) - to start futures trading in tea in the country.

According to sources, everything is likely to be finalised within a few weeks.

Mr Ulhas Menon, Secretary General of UPASI, confirmed that talks were on with some of the leading commodity exchanges but he refused to divulge any name.

Upasi is the only organisation in the country which has got a licence from the Forward Markets Commission (FMC) to start tea futures. But, till date the project has not been kicked off.

In fact, Upasi got its licence almost a year-and-a-half back. The licence expired in October 2004. Mr Menon said the licence has been renewed. Upasi has already formed a corporate entity to carry out tea futures, the Upasi Commodity Exchange Ltd.

"This is the first time in India that the producers of a particular commodity have been given a licence to start futures trading. In all other commodities, it is the trading community that is carrying out the futures trading," Mr Menon said.

Upasi will be using the infrastructure and trading platform of a commodity exchange to carry out the futures trading. Mr Menon said Upasi was likely to complete negotiations with the commodity exchanges and strike a deal by next month.

However, tea producers of North India are apprehensive over about the feasibility of tea futures, mainly, because it is difficult to group tea into selected types and classes.

"We don't feel it is difficult. We have already completed those basic activities. We are confident of starting tea futures and running it successfully," Mr Menon said.

Electronic tea auctioning has been quite successful in the auction centres of South India compared with those of North India.

Sources said that e-auctions had already begun in Coimbatore, Coonoor and Kochi.

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