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July 23, 2007 12:51 IST
India's apex Forward Markets Commission says physical delivery is essential for the transparent functioning of the commodity exchanges.
Inaugurating a seminar on commodity trading awareness here, FMC chairman B C Khatua said that awareness is still lacking when it comes to commodities market and investors even today feel that trading in commodities is satta.
He said before entering the market or investing in commodities, people should have proper knowledge of this emerging market.
Moreover, Khatua said for transparent functioning of the commodity exchanges, 100% physical delivery is essential in future contracts. He added that the progress of commodity trade is not only beneficial for investors but also for the farmers.
The seminar was organized by Rajkot Seeds Oil & Bullion Merchants Association along with FMC.
Talking on the impact of commodity market on the retail prices, Anjani Sinha, director, Multi Commodity Exchange of India said that that price increase and futures trading cannot be linked.
"Rather commodity exchanges operate as per the demand and supply. For instance, the price of ground nut oil is soaring like anything even in the absence of future trading, while the price of sugar is still less," he pointed out.
Rajubhai Pobaru, president, Rajkot Seeds Oil & Bullion Merchants Association, said the association has no plans to go ahead for demutualisation.
He said the Association has access to online trading platform through its tie up with MCX to cater to the needs of new generation investors' class. "Our traditional outcry market is also functioning very well," said Pobaru.
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