The Hindu Business Line : Upasi-MCX tie up for tea futures 'soon'

UPASI Commodities Exchange Ltd (UCEL) is in the process of entering into a tie-up with the Multi-Commodity Exchange of India Ltd (MCX) for conducting futures trading in tea.

UCEL held discussions with MCX last week and thus, the "initiative for futures trading in tea is taking shape through UCEL's tie-up with MCX, which would be finalised soon," Mr N. Dharmaraj, Chairman, UCEL, told Business Line.

Once this synergy becomes operational, Upasi's vision of starting the first futures trading in tea in the world would materialise, he said.

Under the present tie-up with MCX, UCEL will be a trading-cum-clearing member , which "will provide the latter the right to trade, clear and settle transactions for its members." By enrolling as trading-cum-clearing members, UCEL members will also have the advantage of participating in futures trading in all plantation commodities such as pepper, rubber, cardamom and coffee at a later stage so that they can hedge their risks in the highly competitive commodity market, Mr Dharmaraj said.

The discussions with MCX on the technological front is in progress and UCEL is also trying to use the existing tea portal of the Tea Board to synergise the tea futures exchange in the existing e-auction network. If this materialises, the convergence of the spot market and futures market in a single network would become a reality.The intention is to have a cost-effective, Internet-based online trading system through Wide Area Network (WAN) to helpmembers trade while sitting at their offices. The synergy with the tea portal and the usage of the infrastructure available at the auction centres in the country would eventually result in the tea auction centres becoming the trading hubs for both spot and futures trading in tea, Mr Dharmarajhe added.

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