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George Iype |
April 27, 2005
What has the booming commodity futures market got to do with places of worship in India?
Online commodity trading, which has caught the fancy of farmers, investors and corporates alike, is making inroads into religious spaces like the Tirumala Tirupati Devasthanam.
Tirupati, the second richest religious body in the world after the Vatican, has been facing a problem of plenty, all these years:
The temple complex dedicated to Lord Venkateshwara is the world's largest single consumer of commodities like sugar, cardamom, rice, pepper, cashew, turmeric, edible oil vegetables and jaggery. The temple's huge kitchens feed thousands of devotees daily; some 100,000 ladoos are made every day for devotees: all free of cost.
- The shrine draws the largest number of pilgrims each day --more than 60,000 -- in the world. The temple has prospered from the gold, money -- and even hair -- that pilgrims offer to the deity.
- The temple trust, which already has eight tonnes of jewellery lying in its lockers, receives nearly 10 kg of gold ornaments every week from devotees.
The temple, located atop a group of seven hills in Andhra Pradesh, also funds a university and other institutions dedicated to the Vedas, oriental studies, teacher training, agriculture, engineering, medicine and veterinary science. Hundreds of students are staying and studying in Tirupati, that makes the temple complex a large enterprise.
So what novel measures have the temple authorities taken to manage this problem of plenty?
In a unique venture, the Tirupati temple authorities have roped in JRG Wealth Management Ltd, one of India's leading commodity brokers, to install an online commodity futures terminal at the temple complex.
"It is for the first time in India that a temple authority has tied up with a commodity broker. We are very happy that religious places of worship are now hooked on to commodity futures," says Giby Mathew, Managing Director, JRG Wealth Management.
With 157 branches across the country, Kochi-based JRG is a premier stock, commodity and insurance brokerage house.
According to Mathew, for large religious places like Tirupati, where millions of devotees visit every year, the daily rates of various commodities in India are very important.
"For instance, the Tirupati temple is the biggest purchaser of commodities like sugar, cardamom, vegetable oils and cashew nuts in the country. So it is essential that the temple authorities are instantly updated about the fluctuations in the commodity markets," Mathew said.
Through the JRG terminal, the TTD management can now view the commodity prices from all the leading commodity exchanges -- National Multi Commodity Exchange of India Limited, Multi Commodity Exchange of India Limited and National Commodity and Derivatives Exchange Limited.
But how do online futures trading in commodities help the Tirupati temple authorities?
"The commodity terminal at the temple premises is helping the authorities immensely to monitor and evaluate future prices of agro commodities," Anita S Ahella, Finance Advisor and Chief Accounts Office of the Tirumala Tirupati Devasthanam.
Transparency in the purchase of various commodities is the most positive outcome of setting up the commodity futures terminal, points out a senior temple official.
He says every year the temple authorities purchase eatable commodities worth more than Rs 300 crore (Rs 3 billion). Some 30 different contractors are the main suppliers of these commodities who bid and win the annual contracts.
Temple sources say the suppliers have joined hands to form a middleman cartel and take a big cut on the commodities supplied to the temple. "We will eliminate this cartel with the online commodity terminal," said the official.
"With the commodity futures in place in Tirupati, we can now negotiate with the suppliers for bulk quantities of various commodities at cheaper and reliable prices," he pointed out.
However, transparency and efficiency in buying the commodities are not the only reasons that prompted Tirupati authorities to get hooked on to futures trading. This also helps the temple authorities to look at the futures trade in gold.
The temple trust has in its possession as much as 8,000 kg of gold ornaments, studded with precious stones. But Devasthanam is not authorised to sell gold jewellery studded with stones, presented to Lord Venkateshwara by devotees from India and abroad.
As per the Temple Regulation Act that governs the functioning of Tirupati temple, gold jewellery studded with stones cannot be sold in the market. But gold offerings without stones can either remain as ornaments of Lord Venkateshwara or can be melted into coins and be sold to devotees.
The temple trust, thus, regularly sends these gold ornaments to the mint in Mumbai, which turns them into 22-carat coins for sale to devotees.
Since gold is one of the biggest movers in the commodity broking market in India, an online commodity terminal at the temple complex showing the daily futures on gold makes sense to the Tirupati authorities.
Also, a few months ago, the temple management approached the Andhra Pradesh state government to authorise it to dispose the gold jewellery studded with stones because it said it was becoming a huge task to maintain the treasure.
If the government permits it, the Tirupati temple authorities would also emerge as one of the biggest online traders in gold futures in the country.
Are temples or other religious places of worship in the country fascinated with the commodity futures?
"We are getting enquiries from other religious places. I am sure the novel initiative by Tirupati temple will prompt large gurudwaras, churches and temples that consume big quantities of commodities to log on to commodity futures," points out Mathew.
Mathew expects that the Golden Temple -- the Sikhs' revered place of worship in Amritsar -- and Sabarimala Ayyappan Temple in Kerala could be the next in line to install commodity terminals.
Regi Jacob, Managing Director of JRG Securities Ltd, the parent company of JRG Group, says that religious places like Tirupati embracing commodity derivative markets proves the sheer transparency of online futures in India.
He expects the commodity futures market in the country to explode in the coming months."India is the world's leading producer of 17 agricultural commodities and the Indian market is the biggest for commodities, like gold and silver, edible oils, fibres, spices and plantation crops," says Jacob.