Press Release
New Delhi
IIM Lucknow seminar on Commodity futures market
for policymakers throws up interesting concepts: Need for uniformity of sales tax for commodities, introduction of “options†trading;
Indian Institute of Management Lucknow organized a two days training seminar on Commodity Futures Market on December 14 &15, 2007. The seminar was sponsored by the Forward Market Commission (FMC), Ministry of Consumer Affairs, Food and Public Distribution, Government of India, and was for Senior State Government Officials belonging to the Departments of Civil Supplies, Agriculture, Agricultural Marketing, Information Technology and the Heads of State Agricultural Marketing Boards. Policymakers from the states of Assam, Chattisgarh, Madhya Pradesh, Orissa, Punjab, and U.P. participated in the seminar.
The programme was inaugurated by Shri. B. C. Khatua, Chairman, Forward Market Commission (FMC).Other speakers who shared their views in the seminar included Mr. Rajeev Kumar Agrawal, Member, FMC; Prof. Sushil Kumar, Prof. Jabir, and Prof. K G Sahadevan of IIM Lucknow; Mr. Sanjay Kaul, Director and CEO, NCDEX Institute of Commodity Markets and Research (NICR); Mr. Anupam Mishra, Director (IR), FMC; and Mr. Sayed Jaffar, Sr. Manager, MCX.
Mr. Rajiv Kumar Agarwal explained the concept of Commodity Futures Markets and the role of FMC as a regulator. At present there are 21 regional exchanges and 3 national level exchanges that deal in commodity futures. Mr. Rajeev Agrawal told the participants that the three national level exchanges have the technology which is one of best in the world. Even most advanced nations including USA do not have such technology in their commodity markets
FMC, representatives of national level exchanges and the experts were of the view that for efficient and better functioning of commodity futures markets, the Warehouse Receipts need to be treated as negotiable instruments.
There is need to introduce some kind of harmonization in sales tax and other local taxes on commodities as we move towards a nationally integrated futures market. Many experts felt that there is a need to introduce ‘options’ trading in commodities, Because they felt that with introduction of options in agri commodities there will be no need of MSP, an issue which has been highly controversial. There is also a plan to open online commodity spot exchange. This exchange will revolutionize the spot trade in agri commodities by providing real time information on daily prices of various commodities across various markets in the country.
Participants desired that national level exchanges should start futures trading in perishables line fruit and vegetables and flowers. It was suggested that efficient terminal markets will be much better suited for such commodities.
The programme suggests that the commodity futures market enhances market efficiency in terms of price discovery and risk management on one hand and diversification of agricultural production due to proper dissemination of futures price and market information, on the other. Other issues include awareness generations among farmers, policy makers, media etc., regarding role of commodity futures markets; problem of quality management, grading and storage of agri commodities; and development of proper infrastructure at the state levels.
For more information please contact:
Rakesh Kapoor / Shriya Jain
+91- 43056204 / 9871892700
