Aggarwal said the first application sent by the association was rejected by the FMC as it was not on the basis of the performa prescribed by the commission. Devota's efforts to set up a futures exchange was inspired by the huge prospects of trade offered by the northern region, he said.

"Delhi is in a way the gateway for all the north Indian states including Rajasthan, Bihar and Uttar Pradesh and there is tremendous scope for large volumes of trade," he added. The attempt by the association to set up commodity boursein the capital follows food ministry's decision to invite proposals from associations for setting up of forward trading exchanges in oilseeds, oils and oilmeals including rice bran, rapeseed/mustard and sunflower early this month. Other oilseeds, oils and oilseeds for which setting up of futures exchanges allowed by the government were groundnut, cotton seed, copra/coconut, sesame and sunflower. Aggarwal said the Delhi exchange would be an online trading centre, and trading terminals would be installed at different places. He also added that the association was hopeful of generating adequate volume of trade. Delhi is the entry point for a number of oils to the northern states and the demand for oils like rapeseed/mustard from the vanaspati manufacturers are met by the capital's traders. Aggarwal said the association was hopeful of registering at least half of its 300 members as the members of the new exchange.

The management committee of the association is scheduled to meet this week to work out thenitty-gritty of the exchange, he said. The country's first futures exchange on oils was started in castor oil at Mumbai last week. Two more exchanges for trading in soyabean, rapeseed/mustard and rice bran are currently awaiting the clearance of FMC. While the Soyabean Processors Association (Sopa) has sought permission to include rapeseed/mustard in the soya exchange at Indore, the Solvent Extractors' Association of India (SEA) has sought FMC's permission to conduct futures trading in sunflower, rapeseed/mustard and rice bran at Mumbai. DVOTA will have to incorporate a separate company before the commencement of operations.

The food ministry while inviting proposals from associations and groups had directed them to furnish details on methods of trading, clearing, guarantee, delivery, customer protection and management structure, to the department of consumer affairs in the ministry. They would also have to meet the stipulated criteria of participation of diverse interests like growers, processors,exporters, importers, trade and speculators, online system of trading with national or regional reach, efficient clearing and settlement and guarantee system among others.

Government had cleared in August last year futures trading in soyabean, soyaoil and soymeal. India is estimated to have produced 25.3 million tonnes of oilseeds during 1998-99 including rapeseed/mustard crop of 6.44 million tonnes and 12 lakh tonnes of sunflower.