While acknowledging that the Indian economy seems to have weathered the present global economic crisis, Prof K.V. Thomas, Minister of State for Food and Public Distribution, said that the crisis which has affected some of the most developed countries of the world is not expected to leave the Indian economy unscathed.

Speaking at the inaugural function to launch the trading brand logo of ‘commodityonline,' a company based out of Kochi, he said that the country was also endowed with a highly diversified production environment, emerging markets with a huge consumer base, rapid urbanisation, rising middle-class income, and a better regulatory governance — all promising signs that would take us far to be counted among economic giants of the future.

While India is still a country with two-third of the population depending on agricultural commodities, Prof Thomas said that the relevance of commodity futures trading needs no emphasis. The commodity futures markets in India have helped in mitigating price risks arising in the commodities markets, acting as price barometer to various stakeholders of commodity supply chains.

However, our commodity markets are still under-developed and offer huge scope for progress in the sector. Development in the sector is expected to contribute significantly in strengthening Indian economy and the agricultural field in particular and enable it to face the challenges of globalisation.

Commodities today account for 48 per cent of the Indian GDP. Growing by 50 per cent annually, commodity futures has crossed turnover of Rs 115 lakh crore in 2010-11. For the period between April-October 2011, commodity futures has already grown by 72 per cent to touch Rs 106 lakh crore.

We are given to understand that globally commodities have beaten equities for a fifth straight year, a sign which trumpets that demands from developing economies are sustaining global growth that drove prices up almost fourfold in a decade, Prof Thomas said. These facts and figures hold good prospect for us as a developing country.

Commodity Spot Exchanges are helpful for farmers to sell their small lots through these exchanges. Farmers who cannot directly take part in this area due to various reasons can benefit from the price signals emanating from the exchange platform. The farmers of Kerala have gained a lot through the Commodity Spot Exchanges and it is a fact that rubber growers benefited to a large extent in realising over 90 per cent of the final price through participation in the futures markets.

The Minister also shared the fact that he gets a large number of representations from all parts of the country citing the high prices of guar-seed or pulses as indicative of impact of futures trading in escalating prices of these commodities. He assured that while Government was open to the whole concept of commodities exchange and futures trading as a major economic activity in tune with international market integration, the exchanges will have to be extremely sensitive to the complaints emanating from various parts of the country, especially from certain sections of the farming community.

He cited the instance of several Ministries and Departments collecting and disseminating market-related information which has helped to bring greater transparency among all the stakeholders. One such information system was the e-governance portal – AGMARKNET, which has been evolved for strengthening the interfaces among Government organisations, farmers, industry, policy makers, academic institutions and other beneficiaries.

Related Topics
comment COMMENT NOW