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Commodity trading sniffs merger gains

Mumbai, April 10: Signalling a consolidation move, three regional commodity exchanges have expressed interest in merging themselves with the National Commodity and Derivatives Exchange Ltd (NCDEX).

“Three bourses have approached us and talks with one are in advanced stages for exploring collaboration,” NCDEX managing director P. H. Ravikumar told reporters at a function to launch trading in five new commodities here today.

He did not name the bourses seeking merger with NCDEX.

Ravikumar said the regional exchanges had legacy issues as some of them are on the verge of closure and have infrastructure which may be of limited use to us.

NCDEX would not give any money if the mergers come through as the entity being amalgamated would not bring in any value, he said, adding the exchange may look at converting merged entities as trading malls.

On the introduction of futures trading in five new items, he said the exchange would commence futures trading in rubber, jute, gur, pepper and chana (gram) from April 12 for better price discovery in agro-commodities.

The value of output of these commodities is over Rs 12,000 crore per annum and trading in them would add depth to fast expanding commodities platform, he added.

Ravikumar said the exchange was also open to start trading in wheat and rice, for macro-level changes to come through.

The exchange would also look at trading in sugar, but that could only happen in the environment which was devoid of restrictive trade practices, Ravikumar said.

The commodity exchange topped a turnover of Rs 130 crore this month, he said, adding it has 200 active members. Seventy five more members are expected to join by the end of this month.

Farm commodities

The NCDEX has said it would introduce five new contracts in agro-based commodities from April 12.

In an effort to widen its canvas for commodity trading, the exchange would start trading in rubber, jute, gur, pepper and gram increasing the total number of commodities to 15, the exchange said in a statement here today.

“The introduction of futures contracts in these commodities will add tremendous depth to the fast expanding commodity markets and will provide a platform for a variety of participants, including growers, users, traders and investors,” Narendra Gupta, chief business officer of NCDEX, was quoted saying. The NCDEX was already doing futures trading in 10 commodities.

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