This follows the recent decision by the Centre to allow futures trading in oil and oil seeds ending an 18 year ban on hedging in coconut oil.

The three associations in race for bagging the right for kicking off coconut oil futures are the Kochi-based Coconut Oil Merchants' Association, the association of coconut oil traders, the Indian Pepper and Spices Trade Association (Ipsta) and the Ipsta-controlled first commodity Clearing Corporation of India (FCCCI), which deals with the clearing operations of the International Commodity Exchange (ICE), the first and only international futures exchange for pepper in the world run by IPSTA here.

Top sources in Coma told The Financial Express the association has already written to the FMCstaking its claim to kick off futures trade in coconut oil. The association, according to sources, have long experience in conducting futures trade in the past.

Coma had conducted futures trade in coconut oil from 1935 to 1971 successfully, he claimed. Even after the Forward Contract Regulation Act and the Forward markets Commission came into being in 1956, the association managed the futures trade smoothly, he said. The Centre has decided to stop futures trading in coconut oil following rampant speculation by operators leading to unhealthy fluctuation in prices.

IPSTA president Sanjay Mariwala is on record saying that the the association has the experience of over four decades of conducting futures trade in black pepper.

The association also has the necessary expertise and technical knowhow in conducting futures trade. IPSTA could run the futures trade in coconut oil better than any other body with its rich experience and state-of-the-art infrastructure and technology, Sanjaya has said.

T Vidyasagar,president of FCCCI, and also a former president of IPSTA, said that FCCCI has also pitched for bagging the rights for commencing futures trade in coconut oil. He said, in the new world of markets, commodity exchanges are being merged to one another to accrue economies of scale and scope.

Operating in more than one commodity will always be beneficial for growers, traders and exporters of the produce. Therefore IPSTA or FCCCI has a natural right to stake claim for starting futures trade in coconut oil, Vidyasagar said.

He, however, clarified that FCCCI, being an organisation promoted by IPSTA, was not competing with its parent body for bagging the rights. "Our request is that either the rights should be granted to IPSTA or to FCCCI", he added.

He said, the merger of two commodity futures will help the Kerala economy in a big way as both the commodities together make the backbone of Kerala's agricultural economy.