Feb 15: The department of consumer affairs under the union ministry of food and consumer affairs has given the final nod to The East India Jute & Hessian Exchange to resume futures trading in jute sackings. However, futures trading in raw jute still faces stiff opposition from the state government's agricultural department, and is unlikely to see the light of the day in the near future.Hessian exchange officials said that the final notification is dated February 6, 1998, (File No.21/(28)/it/94), and signed by the economic advisor Kamal Kishore.
The exchange has been permitted to resume and continue futures trading in sackings, both jute cloth and bags, for three years, superseding the earlier order dated August 27, 1983, when forward trading in this item was banned. The president of the exchange, Arun Kumar Seth, told The Financial Express that the formal inauguration will be held some time in the second week of March.
"We would have liked to start trading in jute sacking this month itself.However, due to the parliamentary elections, we have scheduled the formal inauguration in the second week of March. Most probably the chairman of the Forward Markets Commission, Vijay K Aggarwal, the secretary of the union ministry of civil supplies, NN Mookerjee, and top state government officials will be present for that ceremony," Seth added.
With the resumption of the futures trading in jute sackings, the hessian exchange has scored a major victory, as most state government officials do not hold a positive view on the exchange.
In fact, they are against the resumption of forward trading in raw jute and this was categorically mentioned at a meeting convened by the secretary of the union ministry of food and civil supplies about six months ago. Even officials from the Bihar government were against the idea.
West Bengal government officials said that futures trading in raw jute will harm the interests of farmers. "In the jute industry the farmers are always the worst hit. Rarely do they get aremunerative price. Futures trading in raw jute will only worsen their situation as market forces and speculation by brokers will pull the prices down. So we are against the resumption of forward trading in raw jute," sources added.
Seth added: "Yes, we are aware of their apprehensions and I personally called on some of the top officials and tried to clear their doubts. I have showed them how farmers can also participate in the trading process and how it will serve their interests. Still they are not too sure of it. May be with time they will realise this." Sources said since jute is the only major fibre cash crop of the state, it has major political and economic implications. The government is trying to tie up all loopholes before giving futures its nod.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
