praveen
09-05-2008, 06:52 AM
The ban on four farm commodities — chana, soyoil, potato and rubber — is likely to cost the country's commodity exchanges dearly with those focused on agri-related products expected to see their turnover slumping by up to 60 per cent, bourse officials and market experts said.
On a daily basis, about Rs 300-400 crore of business would be affected on NCDEX and NMCE alone, the two largest exchanges for trading of agri futures, the analysts said. They added that the ban would not only affect the turnover and volumes, but would dampen investors' sentiments.
The ban on four commodities, announced late last night, could further dampen the growth prospects of the commodity business, which was already reeling under the impact of similar bans announced last year on wheat, rice and some pulses. The Budget proposal to introduce commodity transaction tax (CTT) has already hit the volumes, the analysts said.
"Of four banned items, chana, soyoil and potato are largely traded on NCDEX. This may bring down its turnover by 60 per cent. Rubber is traded on NMCE and its business would be affected by 30 per cent," Forward Markets Commission (FMC) Chairman B C Khatua said.
Karvy Comtrade analyst Vireesh Hiremath said, "Chana and soyoil trade contributes about 36 per cent of the total turnover of NCDEX, while potato has 2 per cent. Overall, about 30-40 per cent of NCDEX turnover would wash away because of the ban."
According to the FMC data, the turnover on NCDEX has fallen by 48.20 per cent to Rs 25,044.72 crore during the first fortnight of April from Rs 48,358.10 crore a year ago. Volumes also took a major dip by 29 per cent to 89.06 lakh tons from 1.25 crore tons.
BS REPORTERS ADD: NCDEX, The country's largest agri commodity trading platform, is scouting for avenues to regain the business lost because of the ban in four agri commodities.
Talking to the media on Thursday, NCDEX MD and CEO R Ramaseshan said two of the four commodities generating the highest revenue on our platform have been delisted.
"This is a matter of concern for us as these two commodities — soyoil and chana — were contributing about 20 per cent to the exchange's turnover," he added.
FMC delisted the four commodities on Wednesday, following a ban on them by the government to rein in the rising inflation. Of the daily average turnover of the exchange at Rs 20,000 crore, it is likely to lose about Rs 400-500 crore because of the ban, said analysts.
On Thursday, the exchange recorded a total turnover of Rs 1,641 crore compared with that of Rs 1,800 crore on Wednesday.
As an immediate measure, the exchange may launch some new products and rework some contracts to activate illiquid commodities.
The Centre's move to ban the futures trade in the four commodities will lead exchanges to look for non-agrucultural and less sensitive commodities, said experts.
"As a result of the Union government's measures to check spiralling inflation, commodity bourses will focus more on metals, energy and exotic product futures," an MCX official said
On a daily basis, about Rs 300-400 crore of business would be affected on NCDEX and NMCE alone, the two largest exchanges for trading of agri futures, the analysts said. They added that the ban would not only affect the turnover and volumes, but would dampen investors' sentiments.
The ban on four commodities, announced late last night, could further dampen the growth prospects of the commodity business, which was already reeling under the impact of similar bans announced last year on wheat, rice and some pulses. The Budget proposal to introduce commodity transaction tax (CTT) has already hit the volumes, the analysts said.
"Of four banned items, chana, soyoil and potato are largely traded on NCDEX. This may bring down its turnover by 60 per cent. Rubber is traded on NMCE and its business would be affected by 30 per cent," Forward Markets Commission (FMC) Chairman B C Khatua said.
Karvy Comtrade analyst Vireesh Hiremath said, "Chana and soyoil trade contributes about 36 per cent of the total turnover of NCDEX, while potato has 2 per cent. Overall, about 30-40 per cent of NCDEX turnover would wash away because of the ban."
According to the FMC data, the turnover on NCDEX has fallen by 48.20 per cent to Rs 25,044.72 crore during the first fortnight of April from Rs 48,358.10 crore a year ago. Volumes also took a major dip by 29 per cent to 89.06 lakh tons from 1.25 crore tons.
BS REPORTERS ADD: NCDEX, The country's largest agri commodity trading platform, is scouting for avenues to regain the business lost because of the ban in four agri commodities.
Talking to the media on Thursday, NCDEX MD and CEO R Ramaseshan said two of the four commodities generating the highest revenue on our platform have been delisted.
"This is a matter of concern for us as these two commodities — soyoil and chana — were contributing about 20 per cent to the exchange's turnover," he added.
FMC delisted the four commodities on Wednesday, following a ban on them by the government to rein in the rising inflation. Of the daily average turnover of the exchange at Rs 20,000 crore, it is likely to lose about Rs 400-500 crore because of the ban, said analysts.
On Thursday, the exchange recorded a total turnover of Rs 1,641 crore compared with that of Rs 1,800 crore on Wednesday.
As an immediate measure, the exchange may launch some new products and rework some contracts to activate illiquid commodities.
The Centre's move to ban the futures trade in the four commodities will lead exchanges to look for non-agrucultural and less sensitive commodities, said experts.
"As a result of the Union government's measures to check spiralling inflation, commodity bourses will focus more on metals, energy and exotic product futures," an MCX official said