He has opted to be a composite trading member (CTM) by paying Rs 10 lakh deposit. His firm Dwarkadas & Company - a leading cotton trader - has been participating everyday since the futures trading commenced.

"Frankly speaking, we are in it more to gain experience and to get the market going" admits Alok Sekhsaria. Despite thin attendance initially, Alok airs firm optimism that a year later there would be a vibrant cotton futures market. The EICA has set the goal at 200 contracts/day whereas Alok has set a personal target of achieving at least 1000 contracts/day. This level of optimism is there not withstanding that only 18, 8 and 4 contracts were traded over the first three days.

To fulfil this goal, the EICA would be opening training centres at major trading places outside Mumbai. The futures market has taken off but now the main focus would be on the awareness programmes, information dissemination and training, says Alok Seksaria.

Alok feels that the cotton trade based onvarieties should be replaced by the one based on the specifications. Instead J-34 or LRA which have staple length of 24-28 mm, one should trade in cotton with staple length 24 or 26 or 28. It does not matter whether it is J-34 or LRA or NHH but only the staple length. Besides one really does not know whether it is J-34 or LRA. Since you are told it is LRA so it is LRA says Alok, adding that there is no seed called LRA.

Navinbhai Sayta

One of the senior member of EICA who has traded in the forward market before 1966, Navinbhai Sayta does not wish to become an active member. "I am 71 years old and my children are in different businesses." However, Navinbhai is very optimistic about the success of the futures system just started.

Started in 1921, the futures trading till 1966 was in full bloom and volumes were enormous. Till 1939, it was linked to New York Cotton futures. Now it is just a humble beginning and there is hardly any volume since the participants are yet to come forward. Right now mostof them feel interested but cautious. They are sitting on the fence but are ready to take a plunge, observes Sayta.

Over a period of time, the participation will increase. The EICA has begun to reach out to the upcountry cotton players. Once they get active, EICA can provide them on-line facilities.

Dhiren Sheth

Dhiren Sheth of Galiakotwala & Co - a CTM member - has not participated after the inaugural day. "We have covered our requirement and right now, have no intention to go to the market till the need arises" says Dhiren Sheth.

Though the participation at this stage is limited, it would be a super success since it would satisfy the need of farmers, traders, ginners etc. "I expect it to be a thriving market two to five years down the line" opines Dhiren.

Jehangir Nicholson

One of the very senior members, Jehangir Nicholson, whose firm Breul & Co was established in 1863, was an active trader in the cotton futures market before 1966. "The government then had wrong mindset instopping the futures saying it amounts to speculation and now also it has wrong mindset" criticises Nicholson. Then there was no Maharashtra Cotton Growers Federation and Cotton Corporation of India and there was a free market and entire supplies used to go through traders. Says Nicholson "I believe these major players are not likely to come into the ring and I wish I am proved wrong."While everybody feels that the participation would increase slowly, Nicholson quips "but how slowly."

Uday Thakkar

As a clearing-cum-trading member (CCTM) who has to pay Rs 2.5 lakh as deposit, Uday Thakkar has been participating everyday since the commencement of futures trading in cotton.

Thakkar is trading on his own account and plans to graduate to the higher category of membership i.e to CTM once his clients start taking interest. "Now the trading in cotton contracts is more organised and daily settlement is a good watchdog" opines Uday Thakkar.

"However if the participation does not increase and there isn'ta good volume traded on this exchange, then the principle of hedge can not work" Thakkar airs his concern. For this institutional players like CCI, marketing federations should come into the ring for which they may have to change their memorandum.

TA Krishnan (Chief purchase manager of Bombay dyeing)

Our annual requirement of cotton is in the range of 1.5 lakh bales valued at around Rs 120 crore to Rs 140 crore. We do import cotton which is a function of price. However, we have not yet decided to trade in cotton futures on our own on the East India Cotton Association where we are one of the members. We can hedge our cotton requirements, through the traders with whom we have been dealing since the past many years. Some of these traders are EICA members and give us the kind of cotton we want at reasonable price. This arrangement therefore, does not require us to go for futures trading on our own at this stage.

Further, the EICA's ICC though a good reference point for the average type of cottongrown in the country, does not guarantee delivery of the traded variety. This does not give the necessary comfort level for the actual users.

It's was a good beginning. Cotton futures trading though allowed, seems to be entangled in a vicious circle of lack of adequate members to sustain the initial enthusiasm and without sufficient members to trade, EICA will not be able to get enough volumes. We will have to wait for couple of months before we could see any serious interest. There are strong players in Mumbai, not all of them have gone out of the city to other cotton trading centres. However, I feel, it could be in the next cotton season.

Bombay Dyeing executive (requesting anonymity)

Taking membership on the EICA's cotton futures wing, will not benefit us in any way. For one,it can't guarantee the quality of cotton traded through the ICC. We are not sure what one can gain from the activity. Two, EICA is more of a traders' club and in an era of free trade, imports of cotton are far moreeasier than hedging on our exchanges.

IC Surana (Sr vice president of Century Textile Mills

Our annual cotton requirements is over Rs 200 crore. However, we have not applied our mind to the newly permitted cotton futures to hedge our requirements. So far we are satisfied with our buying pattern, mostly from the spot market and there have been no defaults whatsoever. Let us wait and see how the EICA is able to make the ICC attractive.

MB Lall (chairman of the Cotton Corporation of India Ltd)

We will prefer to wait and see over next six months the trading pattern of those who have opted for cotton futures. Depending upon the success or otherwise, we will decide whether or not to take up cotton futures trading. Two major reasons for the initial lukewarm response to EICA's efforts. One, there's heavy margin to be paid before one can take a future view on the market. Two, of late the offtake from cotton mills has been declining considerably. In such a situation why would people committhemselves to high margins in a dull market? People won't like to just throw away money.There will have to be a lot of thinking on the subject before the cotton futures can become attractive for cross section of cotton economy.

Vijay Garg (Director, operations, Morarjee Mills)

Our annual requirement of cotton is around 30,000-40,000 bales valued at over Rs 35 crore to Rs 40 crore. Of late, we import around 20 per cent of our requirements. We have not yet decided to participate in cotton futures trading. For one, the concept of futures trading is new for which training is required to be able to trade in the futures market. We are keen to learn the subject, understand the intricacies of the subject, before we can take any decision on whether or not to take up futures trading. We were not part of the EICA's initial mock trading efforts.

HR Kale (General Manager, sales, Maharashtra Cotton Growers' Federation)

We have over 20 lakh cotton farmers as our members whose annual cotton productionwould be around 18-20 lakh bales valued at over Rs 1,800 crore to 2,000 crore. Despite this we don't think futures trading would serve any positive purpose for our members. Even without futures trading our members seem to have been comfortable. May be we need to think more on this issue. But currently we are not too sure on the possible benefits that trading in futures will offer to our members. Statistical evidence on price trends for cotton on say New York Cotton Exchange do not support any evidence of benefits available to cotton growers.