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Indian firm to launch online commodity trading

Indian portal Agribuzz.com will launch online trading of several agricultural commodities by mid-January, a senior company official said on Friday.

"We started trials for online trading on November 15 and plan to go for actual trading by January 15 next year," Gopal Ahuja, chairman and managing director of Agri Infotech Online (India) Ltd, promoter of the portal, said.

The company initially plans to offer online trading facilities for groundnut, cloves, cardamom, sugar, rice, cassia, black pepper and almonds.

"Very shortly we will be bringing online trading of commodities such as wheat, pulses, cashew, soybean/meals, edible oils, other spices and some dry fruits," Ahuja said.

The portal's trading platform allows members to bid, offer and negotiate on a real-time basis, he said.

The company has made arrangements with Dun and Bradstreet Information Services India Ltd to verify the creditworthiness of the parties interested in trading online.

It has also arranged for Swiss company Societe Generale de Surveillance to conduct pre-shipment inspection of commodities, Ahuja said.

Ahuja said his company was also in talks with some financial institutions to provide credit to participating traders.

Link with Refco

The company has also tied up with international futures market operator Refco (Singapore) Ltd, a Refco Group company, to act as their broker in India.

"Since the Reserve Bank of India allows corporations holding physical stock of soft commodities like soy and coffee to hedge in various international markets, Refco is offering its services through Agribuzz.com," Ahuja said.

Agri Infotech will refer companies interested in hedging their commodities in the international market to Refco after getting necessary approval from the Reserve Bank, Ahuja said.

He said the Refco Group currently trades at more than 37 exchanges in 21 countries.

India allowed corporates in September 1998 to hedge price risks in commodities including castor oil, coffee, groundnut oil and pepper through authorised international commodity exchange dealers.

It also allowed hedging in crude and petroleum products in August 2000 by local corporates to help them manage risks from international price fluctuations.

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