Moreover, ``there is a need for an intense introspection among the office-bearers themselves, as regards the need of futures trading in the oilseeds complex, and if so, the steps required to make it a success'', said a top BOOE source requesting annonymity. This may be for the first time in the 75-year plus history of the BOOE, that the members have informally united to stay away from trading formally - not even the token trading has taken place in the futures contract, by some of the office bearers responsible for promoting the exchange to outsiders. And the size of the domestic oilseeds complex is said to be a huge Rs 50,000 crore plus and with over Rs 10,000 crore worth of import of palmolein each year, the overall size of the oilseeds and vegoil economy is said to be over Rs 60,000 crore. The BOOE surely has at least half the share of the massive oilseeds complex, but surprisingly, there were no hedging activities on the exchange last week.

At a time when the BOOE plans to expand its horizon, by changing its name to Bombay Commodities Exchange by February this year, and also plan to introduce online trading by early April this year, the simmering differences both within the exchange as also with the markets regulator seem to be coming to the fore.

This step, alongwith the countinued presence of even some of the office bearers of the BOOE, in the thriving illegal vegoil trading markets at Mumbai, Bhabhar and Rajkot in Ahmedabad all point to one thing : The exchange is heading fast on a collision course with the futures markets regulator.

Because of these reasons there has been no trading in futures, of various commodities permitted on the BOOE, since the beginning of the New Year. Not even in the RBD palmoil, which last Friday plunged to an all-time low of Rs 183-85 per 10 kg following the continuous sliding of the prices on the comex of Malaysia, the main exporter of palmoil.

``There is a peculiar dichotomy within the BOOE,'' said a top BOOE source requesting annonymity. ``Each of the exchange's office bearers (there are some 40 directors on the BOOE, including non-traders nominated by the FMC) want others to come and trade on the exchange, but themselves stay away''.

And ever since the Centre permitted trading in futures of majority of oilseeds and their derivatives, as also in RBD palmolein (India is the only country that trades in futures of RBD palmolein) the volumes have been declining and were the bare minimum till end December. Since then there is no formal trading on any of the 25-plus commodities permitted.

So, while there is a minimal outstanding position of around 500 tonne on the BOOE, the daily outstanding volumes on the parallel/illegal markets is said to be over 11,000 tonne! Said another top BOOE source ``You can take a horse to the water, not force him to drink it'', meaning it's extremely difficult to convince members of an exchange with 75 years of history to trade on the formal platform!!

Three points which have come to the fore after discussions with a cross section of persons associated with the exchange are: One, the BOOE has high levies, including the stamp duty and upfront margins, to transact in futures of even a single commodity. For example, the daily upfront margin for even a small contract of say 10,000 tonne of RBD palmolein attracts an upfront margin of Rs 1 lakh.

Two, trading in illegal and parallel markets is extremely cheaper and totally unregulated, so no botherations whatsoever. But neither the BOOE's office bearers nor the FMC seem to be interested to curb the thriving illegal trading markets for their own respective reasons. FMC's acting chairman Mr Baldev Chand has been of the opinion that ``it is extremely difficult to police these activities, we've written to the state police and await their response''.

Three, there is rampant misuse of NTSD (non-transferable specific delivery) contracts, which are not necessarily to be traded on the BOOE's trading floor. Under the Forward Contracts (Regulations) Act, these NTSD contracts can be used as a forward mechanism, though not on the exchange's premises. However, its non regulation of illegal trading prompt traders to avoid trading on a formal trading platform of the exchange.

``We have written to the FMC of these issues, including allowing changes in the prohibitive upfront margins and the rampant misuse of the NTSD mechanism,'' said the BOOE source. ``For its own reasons, the FMC seems to be reluctant to make changes, that may result in trading returning to the floors of the BOOE,''