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Palmolein futures trading likely in June

The Bombay Oilseeds & Oils Exchange, or BOOE, has further postponed the start of local futures trading in palmolein to mid-June, a top exchange official said on Monday.

"There has been some delay on our part due to the changes in our by-laws and some infrastructure work that had to be sorted out," BOOE president Navinchandra Shah said.

The exchange had initially planned to begin futures trading in palmolein by March but it was delayed.

Shah said futures trading will initially be in palmolein, sunflower oil and groundnut oil and will later be expanded to include other commodities.

"The Forward Markets Commission is waiting to get the green signal from the central government in order to grant us permission to start trading," Shah said.

India has become one of the world's leading vegetable oil importers in recent years due to a slump in local oilseeds production and falling international prices.

Industry officials see a big scope for futures trading in India as imports rise and edible oil prices remain volatile.

Shah said the exchange will initially operate on the outcry system and then graduate to online trading.

India's edible oil imports surged to 4.39 million tonne in the 1998-99 (November-October) oil year from 2.68 million tonne in the previous year.

RBD (refined, bleached and deodorised) palmolein accounts for the bulk of India's imports besides soft oils including soy and sunflower.

RBD palmolein is mostly shipped from Malaysia, the world's leading exporter.

The Indian government approved futures trading in eight edible oilseeds and their derivatives a year ago as part of its reform programme.

India had banned most futures trading about 30 years back to iron out the impact of sharp price fluctuations, but revoked the ban in six minor commodities in 1993. Trading in coffee and cotton has since resumed.

The Soya Futures Exchange, located in the central state of Madhya Pradesh, began trading in soyoil and its derivatives in mid-February.

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