Commodity futures market set to grow by 25% this fiscal

PTI New Delhi | Updated on April 07, 2011

The commodity futures market is expected to grow by 25 per cent to about Rs 150 lakh crore in this fiscal due to recovery of the global economy, commodity markets regulator Forward Markets Commission (FMC) said.

The cumulative turnover of the commodity futures market, which comprises of 23 commodity bourses, is estimated to have risen by 53 per cent to Rs 119 lakh crore in FY’ 11, it said.

“I would take a conservative view of 20-25 per cent growth at Rs 140-150 lakh crore in the current fiscal,” the FMC Chairman, Mr B.C. Khatua, told PTI.

Since the global economy is in “recovery mode”, trade volumes are expected to be higher on the commodity exchange platforms, he said.

Mr Khatua noted that the growth of the commodity futures market may not be like last fiscal as prices of gold and silver are already at peak level.

He, however, said commodity bourses have potential to achieve higher than the conservative growth estimate of 25 per cent this year if the Forward Contracts Regulation Act (FCRA) Amendment Bill is passed in Parliament.

The growth of the market would also depend on the performance of the new exchanges, he added.

The bill, which has been referred to the standing committee on food, consumer affairs and public distribution, provides autonomy to the FMC on the lines of the Securities and Exchange Board of India.

It will empower FMC to take key decisions such as recognising or de-recognising commodity bourses, raising fees from exchange members, imposing penalty on errant market entities and will open the door for options trading in commodity derivatives.

Currently, FMC, which oversees the function of five national and 18 regional commodity exchanges, is largely functioning in its traditional format, though the market has been liberalised since 2003.

Published on April 07, 2011

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