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BOOE to kick off oil futures from Aug 18
Sharad Mistry
Mumbai: Trading in futures of RBD palmolein, groundnutoil and sunflower oil will for the first time be kicked off finally on August 18 at the Bombay Oilseeds and Oils Exchange (BOOE), Vashi, Navi Mumbai. The total number of commodities futures traded on the BOOE will hereafter be nine, with trading in futures of castorseed (domestic) and castoroil (international) already in place.The BOOE will be the first commodity exchange in the world to trade in the futures of RBD palmolein, even as Malaysia is the largest exporter of the commodity, but trades only in futures of crude palmoil on its Commodity and Monetary Exchange of Malaysia (Commex). According to the BOOE, the exchange will commence trading in futures of the following contracts:
RBD palmolein-October, November and December 2000 delivery contracts Groundnutoil expeller-November 2000 and January 2001 delivery contracts Refined sunflower oil-November 2000 and January 2001 delivery contractsLast week, the BOOE received the much-awaited formal approval to trade in the futures of these commodities from the government vide notification no 12.4.IT/2000 dated August 7, 2000. Prior to this notification, the government had formally recognised the BOOE to trade in six commodities- groundnuts, its oil and oilcake and sunflowerseed, its oil and oilcake. The clearance to trade in the futures of RBD palmolein was made available separately. While the government has not fixed any time frame to continue trading in the oilseed complex of groundnut and sunflowerseed, the permission to trade in futures of RBD palolein is for a period of five years commencing from August 8, 2000 till August 7, 2005."We are happy to receive the permission", said BOOE president Navinchandra Shah. For more than past one decade, Shah has been spearheading the campaign to permit the futures trading in the edible oilseeds complex. The government finally relented in mid-1998 and permitted futures trading in majority of agro produce commodities after a gap of over three decades. Now the government's view is that futures trading in all commodities will be permitted, including tea, rubber and bullion. In this direction, the government has also approved last month the formation of a nation-wide commodity exchange, which for want of any other name at this juncture, is expected to be National Commodity Exchange (NCE). The trading in futures of RBD palmolein assumes importance primarily because it is the single largest edible oil imported in the country each year to fill the demand supply gap of edible oils in the country. Malaysia and Indonesia are the two largest exporters of palmolein. Annually, India imports around 4.5 mt of edible oil, which during 2000-2001 is expected to cross 5 mt. The BOOE's maiden venture to experiment in trading of a commodity which is primarily imported from neighbouring countries, is being watched with keen interests from players of both Malaysia and Indonesia. Commex's general manager Raghbir Singh Bhart, during his visit in mid-June this year had clearly indicated that BOOE's efforts to kick off trading in RBD palmolein is important for palm oil traders and exporters of Malaysia. "We will look forward to see how we can take advantage of this maiden futures contract in the world, and if possible we will even extend our trading activities on to the BOOE, or see if the contract can be trade on the Commex". The BOOE's Prime Commodities Clearing Corporation of India (PCCCI) with an initial corpus of Rs 1.1 crore will cover the trading risks of all the trading members of the futures segment. The BOOE has over 600 members, however, only 20-odd members have opted to join the futures segment. Over the next couple of months, the list is expected to swell to over 50. As the first serious marketing exercise, the BOOE will address today (Monday) cross section of edible oil importers (mainly palmoil) and invite them to take advantage of the exchange's facilities of hedging mechanism and minimise the attendant risks. Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.
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