Saurashtra in Gujarat boasts of being the cradle of Futures trading in India.
Certainly, the Gujarati business acumen played a big role in the rise of futures trade in Saurashtra and other parts of the state.
During the British rule in India, there was no restriction on forward trading in commodities. This helped Futures trade flourish in various erstwhile princely states of Saurashtra. The hub of this trade was in Rajkot and Surendranagar districts.
At present, there are two official forward trading exchanges in Saurashtra, which are recognised by Forward Market Commission. Rajkot Seeds, Oil and Bullion Association Ltd deals in forward trading of castor seeds and the Surendranagar Cotton Oil and Oilseeds Association Ltd deals in futures trading of cotton.
Tale of forward trading in Saurashtra dates back to 1936 when the first official forward trading company - Association of Traders of Rajkot - was formed in October.
To begin with, this traders' body started dealing in sugar forward contracts only.
But, futures trading in sugar failed immediately. Then businessmen started forward trading at Mumbai, Bhavnagar, Jamnagar, Gondal, Dhoraji and at places where forward business was done unofficially, said 79-year-old Haribhai Chhaganbhai Patel, former president of Rajkot Oilseeds, Oil and Bullion Association.
In another development in 1936 itself, a few other traders of Rajkot formed an association - Rajkot Seeds, Oil & Bullion Merchants Association Ltd. This association started dealing in forward trading of edible oils, castor seeds, silver and groundnut.
Later, FMC granted recognition to this association and allowed the body to conduct Futures trading in eight commodities, besides castor seeds.
In 1961, the Union government banned Futures trading of all commodities in the country. However, in 1991 the Central government lifted the ban and the Rajkot body was allowed to continue forward trading in castor seeds.
Meanwhile, a subsidiary company of this association was set up as Rajkot Board of Trade Ltd, which became a member of the Multi Commodity Exchange on July 22, 2006. Soon, it started dealing in various commodities, including metals and energy, said president of this body Rajubhai Pobaru.
In 1952, Futures trading was brought under the regulation of FMC. The commission recognised Rajkot Seeds, Oil & Bullion Merchants Association Ltd with ring centres at Rajkot, Bhavnagar, Jamnagar, Dhoraji and Veraval.
But Surendranagar was deprived of any forward trading facility. Later, after much effort by trade circles, FMC granted a futures trading exchange for cotton and cotton seeds at Surendranagar.
Thus, Surendranagar Cotton Oil and Cottonseeds Association Ltd became the second recognised Futures trading exchange in Saurashtra.
