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Eyeing a share in the commodities trading segment, the BSE has tied up with yet another commodities body, Federation of Indian Spice Stakeholders (FISS), on Tuesday. The latest agreement is a move to further the growth and systematic development of commodity derivatives markets in the spices complex.
Last month, BSE had inked an agreement with the Soyabean Processors Association of India (SOPA) for ensuring growth and development of commodity trading in soyabean and its derivatives. This is seen enabling traders to manage price risk in a better manner in the soyabean complex.
As per the terms of the MoU between the BSE and FISS, the two entities will co-ordinate and work jointly in the initiatives to deepen the understanding of the commodity market among stakeholders, which includes traders, farmers and other participants.
FISS with its domain knowledge and unique stakeholders ranging from farmers, traders and exporters, will assist BSE in designing new and innovative products.
Commenting on the development, Ashishkumar Chauhan, MD & CEO, BSE said, “BSE and FISS fully acknowledge and appreciate their strengths, resources, experience and expertise therefore they feel it expedient to join hands for mutual benefits. It is aimed at developing and strengthening Commodity derivatives market.”
“Currently, we see jeera (cumin seed), coriander and turmeric being traded in commodities derivatives segment on other commodity exchanges. But there is ample scope in other spice commodities such as black pepper, chilli among others. Once BSE brings its own commodity trading platform, we see such avenues opening up,” said Ashwin Nayak Chaiman, FISS.
According to Nayak, existing spices derivatives face instances of irregularities and cartelisation. “By forging associations with stakeholders, the exchange is ensuring better linkage with traders and participants in designing contract specifications and making it acceptable to them. This will reduce the chances of future stand-off between exchange and traders.”
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