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Money > Reuters > Report July 31, 2001 |
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Commodity bourse to go online by Aug-endThe Bombay Commodity Exchange has started trials for online trading and will go live by end August, a senior company official said on Tuesday. The exchange, which offers domestic futures trading in commodities -- mainly castor seed and RBD palmolein -- has brought in computer software and training firm SSI Industries to develop an Internet-based trading system. "We started mock trading about 10 days ago to familiarise commodity traders with the new system," Anjani Sinha, chief executive officer of BCE, said in an interview. Traders will have to become members of the exchange to participate in futures trading through the BCE's Internet site www.bceindia.com, he said. "The membership will be transferable," he said, meaning traders could sell their memberships to others. The BCE, formerly known as the Bombay Oilseeds and Oils Exchange, will gradually phase out the existing open outcry trading system. Trading in commodity futures in India is over a century old but was stopped by the government in 1975. It was resumed three years later on a limited scale in a few products like potatoes. India now allows futures trading in 35 commodities, including several oilseeds and oils, some fibres, turmeric, pepper and castor seed. Sugar was recently added to the list but futures trading in grains such as wheat and rice is still banned. The combined trading volume of all commodity exchanges in India was 19.2 million tonnes in 2000-01 compared with 17.7 million the previous year. Membership to rise gradually BCE, one of 19 commodity futures exchanges in the country, has 560 members. It is the second exchange to start online trading in India. The Bangalore-based Coffee Futures Exchange has launched a screen-based trading system connecting its various offices. "But we don't expect all the members to join online trading at the beginning," Sinha said. Initially about 40-50 members are likely to participate in the web-based futures trading, he said, adding the number could rise to about 150 in the next six months. "The rest of the members may join gradually," Sinha said. The exchange has also set up a clearing and settlement agency, Prime Commodities Clearing Corporation of India, to undertake functions like processing of traded transactions, receiving and maintaining payments and settlement of contracts. "The corporation has a settlement guarantee fund to provide counter-guarantee against financial defaults," Sinha said. BCE handled 16,700 tonnes of castor seed in the fiscal ending March 2001 against 18,310 tonnes the previous year. About 9,000 tonnes of RBD palm olein were traded in 2000-01 since the launch of trading in the commodity in August 2000. "Trading volume is likely to pick up with the launch of (the) online trading system," Sinha said.
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