Financial Daily from THE HINDU group of publications
Thursday, May 25, 2006
Financial Daily from THE HINDU group of publications Thursday, May 25, 2006 |
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Agri-Biz & Commodities
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Jute EIJHE to restart raw jute futures Kohinoor Mandal
Kolkata , May 24 The Forwards Market Commission (FMC) has permitted the East India Jute and Hessian Exchange Ltd (EIJHE), the oldest commodity exchange in the country, to restart raw jute futures. The FMC permission came despite an order from the Jute Commissioner's office issued in December laststating raw jute price should not exceed Rs 1,468 a quintal.
Bumper crop
According to Mr Arun Kumar Seth, President of EIJHE, the exchange would start trading in raw jute futures for the August delivery. Though the current raw jute prices are hovering at around Rs 1,750 a quintal, the market expects that it would fall well below Rs 1,468 a quintal in August. "Everyone in the jute industry is expecting a bumper crop this year. So, naturally the current demand would ease out and prices would fall. Hence, there would not be any problem in meeting the Jute Commissioner's order," Mr Seth told Business Line. Raw jute futures on EIJHE were suspended way back in 1964. Subsequently, several committees of the exchange lobbied hard with the Union Government for resumption but hardly anything happened. The West Bengal Government was reluctant too. A couple of years ago, FMC had allowed three commodity exchanges to start raw jute futures. At present, raw jute futures trading is active on the Ahmedabad-based National Commodity Exchange and the Mumbai-based NCDEX.
FMC CHIEF TO INAUGURATE
On April 7, 2006, FMC first granted "recognition" to EIJHE to conduct futures trading in raw jute. However, to get the permission, EIJHE made necessary changes in its raw jute trading bylaws. As per the FMC directive, delivery has been made mandatory too. "We have followed all the guidelines specified by FMC. We are ready to start the raw jute futures trading any day. We want the trading to be inaugurated by the FMC chairman," Mr Seth said. Despite this development, EIJHE is reluctant for a resumption of jute goods futures trading. According to Mr Seth, there is hardly any interest. "In the present circumstances, 70 per cent of the jute goods are consumed by several governmental agencies. So, there is hardly any participation from the private organisations. Hence, there is not much interest in it", he said.
RETURN OF MEMBERS
Meanwhile, this development is slowly bringing back the ring members who had earlier quit the exchange. From 84 ring members, who were trading in jute goods, it had dropped to 19. EIJHE has 334 full members. "The jute goods ring members are shifting over to raw jute. Moreover, the older members are also returning. In short, we can say that we are witnessing a renewed vigour in the exchange," he said.
More Stories on : Jute | Commodity Exchanges
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