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October 4, 1997 |
India's first international exchange, in pepper, to begin next weekD Jose in ThiruvananthapuramThe much-delayed International Pepper Futures Exchange in the port city of Kochi, Kerala, will become operational next week. According to information available, India�s first global exchange for commodities is scheduled to be inaugurated by Union Minister of State for Civil Supplies Raghubir Prasad Singh on Monday, October 6. The inauguration will coincide with a meeting of the international pepper community at Kochi from October 6 to 11. The exchange, set up at a cost of Rs 100 million, will be run by the Indian Pepper and Spices Trading Association as per the understanding reached by the international community at the instance of the United Nations Commission for Trade and Development. A team from UNCTAD had selected Kochi for the international exchange as it has successfully been running a domestic exchange. An additional floor for trading will also be set up at the international exchange in Kuala Lumpur after the Kochi centre becomes fully operational. The exchange will have delivery points at Kuching, Panjang, Singapore, and Brazil, the major pepper producing centres worldwide. The IPSTA has already set up an additional trading hall for the international trade of pepper with all modern facilities at a cost of Rs 50 million. The trading hall has two electronic boards to show the prices instantly. The hall with 24 cubicles is fully computerised. IPSTA spokeswoman Reshma told Rediff On The NeT that the crying out system will continue for auctioning until the system goes online in a year's time. She said the Government of India has banned foreign participants from trading in pepper futures outside Kochi in line with the inauguration of the new exchange. Reshma said an independent clearing house named the First Commodities Clearing Corporation, which was set up as part of the international exchange, will guarantee the transactions made in the exchange. The corporation will register, clear, settle and guarantee contracts reached at the exchange. IPSTA President T Vidyasagar said the exchange will go a long way in covering the risk factor. He claimed that futures trading can provide adequate safety, particularly to commodities, the prices of which fluctuate widely. The cover charge, he said, will take care of the loss in government subsidies and provide incentives for exports. The trading volume of pepper in Kochi is expected to go up substantially after the international exchange ensures the participation of countries like Brazil, Indonesia and Malaysia in the trade. The domestic futures exchange at Kochi has already a trade volume of 100,000 tonnes per annum. The exchange is likely to be a trendsetter for further international commodity exchanges in India. The Union agriculture ministry has already recommended 17 such exchanges for agricultural products. There are so far only 40 commodities futures exchanges throughout the world. These range from cereals to dried cocoon, pork, and broiler chicken.
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