Mangalore, Aug 29
THE futures market has registered a growth of 700 per cent in the first quarter of the current financial year compared to the corresponding period of the previous year, according to Mr Rajeev Kumar Agarwal, Member of the Forward Markets Commission (FMC).
Speaking to presspersons on the sidelines of a general awareness programme on futures trading here on Monday, he said: "The total value of trade in the first quarter of the current year has been around Rs 3.02 lakh crore, which is more than 700 per cent of the volume of trade over the corresponding period last year."
He attributed this to the growing awareness about the futures market among people and the introduction of various new commodities in the market.
The value of trade in futures market, which stood at Rs 30,000 crore during 1998-2001, increased to Rs 5.67 lakh crore during 2004-05.
He said trading in over 10 commodities was likely to begin soon as permission had been given for it. Mr Agarwal said most people were not aware of the role of futures market in price discovery and price risk management. "We want to change the old mindset that commodity trading is merely a speculation," he said.
He said futures market would help farmers in taking pre-sowing and post-harvest decisions.
Asked about the reasons for the low trading in cashew, he said more than 60 per cent of the commodity was exported, and only a few domestic traders had shown interest in trading in this commodity.
Areca in futures trading?Mr Agarwal said arecanut growers in Mangalore region had shown interest in including arecanut in the futures trading. However, it was still in the nascent stages of discussion.
Mr L.N. Kudoor, Campco President, told Business Line that various factors had to be taken into consideration before trading arecanut in futures market. "Arecanut is being differentiated into various grades, and the arecanut growers should be in a position to supply arecanut of all the grades to the market. We will discuss the issues with the FMC officials and come to a decision on its trading in futures market," he said.