"Resuming trading operations is impossible."
Bangalore, July 5
THE Coffee Futures Exchange of India (COFEI), which has been inactive for more than two years, is likely to wind up operations.
COFEI had sought renewal of its licence that had expired on March 31, from the Ministry of Food and Consumer Affairs through the Forwards Market Commission. However this has not happened till date.
"Resuming trading operations is impossible," Mr Arun Bidappa, Chairman, COFEI told Business Line. "We don't see any point in running a single commodity exchange as it is not viable commercially," Mr Bidappa said, adding that the only way the exchange could continue functioning was through collaboration with other multi-commodity exchanges in the country.
Mr Bidappa said COFEI was in discussions with multi-commodity exchanges such as NMCE and NCDEX but the decision rested with the members.
At the forthcoming annual general meeting on July 25, COFEI members would decide on the future course of action. COFEI is seeking an enabling resolution from the members for its functioning.
Mr Bidappa said: "If these efforts fail, we may wind up and return the money to our members."
COFEI, set up in 1998, had almost stopped trading for the last two years. In its hey day, an average 700 lots were traded daily with about Rs 1 crore turnover.
COFEI had the distinction of launching the world's first futures in raw coffee in 2000.The decline of the exchange started with a drop in volumes over the last five years, as coffee prices hit a 30-year low. The entire plantation sector plunged into crisis, resulting in poor trading volumes. The exchange's attempt to rope in corporate houses were unsuccessful.