Addressing the exchange members at the 72nd annual general meeting BOOE president Navinchandera Shah said that they had a meeting with ISE in this regard.

The exchange is also planning to embark on a major membership drive and is also looking into the possibilities of making some of the conditionalities more market-friendly.

Shah expressed the hope that the activities of the exchange will expand manifold in the near future and more players would be attracted to the futures industry given the volatility of the physical market for oilseeds and oils.

In order to attract corporates, financial institutions, brokerages, market makers and others, the exchange will examine conditionalities of margins, security deposit and periodicity of clearance.

While the endeavour to fine-tune trading will continue, no compromisees will bemade in the transperancy and the market integrity, he assured.

He strongly advocated the need to allow hedging in imported palm oil, a long standing demand of the exchange. He said the domestic vegetable oil market went through a roller coaster ride in the last two years under the influence of both local and international factors.

For instance, groundnut oil prices crashed from an unprecedented level of Rs 615 per 10 kilograms during mid-1998 to Rs 352 by July 1999. Similarly, international palmolein prices crashed by half from $700 a tonne in mid-1998 to $350 a tonne in July 99.

In view of large-scale import of palmolein, the prices in domestic market also fluctuated violently reflecting international trends. Refined palmolein touched a new low of Rs 191 per 10 kgs in June-July 1999.

This gives an indication of the wild price swings and the price risks the players are subjected to, he stated. Unfortunately the players could not hedge their price risks in the absence of futures trading.

Consideringthe importance of refined palmolein in the basket of India's imports and the volatile nature of the market, it is imperative that the futures trading in palmolein be permitted without delay.

Moreover it is not in the list of restricted items and thus fit for futures trading, he said.

He strongly felt that the government must permit futures trading in palmolein in the interest of promoting healthy and organised activity in the physical market.