Pan-Asian commodity exchanges

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: in many commodities may easily shift eastwards. Policymakers across the region need to speed up the pace of reforms in commodity markets and also take measures to expand the same.

Already, major commodity exchanges of Europe and the US are tracking demand-supply fundamentals of Asian countries like China and India for price discovery. The IntercontinentalExchange Inc for sugar and Chicago Board of Trade for wheat are prime examples.

The commodity price boom of the last 3-4 years has generated surplus funds with investors and governments of commodity-producing Asian countries. As a result, there appears to be a gradual shift in financial clout and economic momentum from west to east. If even a small fraction of surplus international funds can be attracted to boost the liquidity of Asian commodity exchanges, there can be a marked improvement in efficiency of these exchanges.

Presently, MCX has a strategic partnership with some Asian exchanges such as Tokyo commodity exchange, Zhengzhou commodity exchange, Shanghai futures exchange and Busa Malaysia derivatives Berhad. Cooperation across Asia, amid globalisation, could facilitate the emergence of an Asia-centric new world economic order of the 21st century.