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PRESS TRUST OF INDIA
New Delhi, Aug 4: Mock trading at the proposed Cotton Futures Exchange in Mumbai has been put off to September as the by-laws for the bourse are still not in place, official sources said here.
"The by-law for the exchange has not yet been finalised. The forward markets commission (FMC) is looking into it," the sources in the civil supplies ministry said.
East India Cotton Association (EICA), the organisation behind the setting up of the exchange, had forwarded a set of rules and regulations to the FMC, which had suggested some changes in the by-laws.
"Nothing is expected to happen in the proposed exchange until the fMC finalises the by-laws," the sources said.
Initially, the exchange was expected to hold mock trading this month before going on-stream next month.
The government had given the go-ahead for the exchange in November last and since then EICA has been seriously involved in setting up the exchange.
Based on the success of the Mumbai bourse, government proposes to allow exchanges in other New Delhi, Aug 4: Mock trading at the proposed Cotton Futures Exchange in Mumbai has been put off to September as the by-laws for the bourse are still not in place, official sources said here.
"The by-law for the exchange has not yet been finalised. The forward markets commission (FMC) is looking into it," the sources in the civil supplies ministry said.
East India Cotton Association (EICA), the organisation behind the setting up of the exchange, had forwarded a set of rules and regulations to the FMC, which had suggested some changes in the by-laws.
"Nothing is expected to happen in the proposed exchange until the fMC finalises the by-laws," the sources said.
Initially, the exchange was expected to hold mock trading this month before going on-stream next month.
The government had given the go-ahead for the exchange in November last and since then EICA has been seriously involved in setting up the exchange.
Based on the success of the Mumbai bourse, government proposes to allow exchanges in otherparts of the country. The South India Cotton Association (SICA) and traders in Kanpur have also sought to start cotton futures.
Cotton futures existed in Mumbai three decades ago.
Meanwhile, the textile industry demanded discontinuation of cotton monopoly procurement scheme in Maharashtra for the future exchange to succeed.
"A totally free market is required for futures exchange. There is no point in having the monopoly procurement scheme," North India Textile Mills Association (NITMA) raw material committee chairman Vinod Ahuja said.
Under the scheme, the Maharashtra cotton cooperative growers marketing federation procures the entire cotton produced in the state. The procurement is being done as per a state legislation, which has been extended for another year this season.
"The monopoly scheme should really end. It will dilute the system of future exchange," Indian Cotton Mills Federation secretary general MP Gajaria said.
Ahuja said while farmers in rest of the country were not given cover, onlyMaharashtra growers were extended the benefit.
Initially, the exchange is expected to function in covering the risks for textile mills than their cotton requirements.
However, the industry expects things to settle down in due course as reintroduction of futures after a long period would create problems initially.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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