The Hindu Business Line : Cofei mulls joining NSE-ICICI combine

THE Coffee Futures Exchange of India (Cofei) Ltd is considering a proposal to join hands with the National Stock Exchange-ICICI consortium to revive the sagging fortunes of the coffee futures exchange it is running in Bangalore.

The consortium,comprising National Stock Exchange (NSE), ICICI, Nabard and LIC, was cleared by the Government last month to have a commodity futures exchange with the status of a national multi-commodity exchange.

"Cofei has held preliminary talks with the NSE-ICICI combine on joining the consortium. Firm plans are likely to be in place once the formal permission comes from the Government for the cosortium to launch the commodity futures exchange," sources, who did not wish to be identified, told Business Line.

The Cofei President, Mr Arun Bidappa, when contacted declined to comment.

According to industry sources, a move by Cofei to join hands with NSE-ICICI combine would make sense, as in the current scenario, single commodity exchanges would not be able to survive alone. "Single commodity exchanges will have to think of such tie-ups since their existence is under threat due to the coming up of multi-commodity futures," the sources said.

In October, Cofei authorities had said they would prefer to operate on the platform of National Multi-Commodity Exchange as it would help them go online throughout the country.

Besides the NSE-ICICI consortium, the Government has decided to give national multi-commodity exchange status to the Ahmedabad-based National Multi-Commodity Exchange of India Ltd (NMCEIL) and the Indore-based National Board of Trade (NBOT).

On Saturday, NMCEIL launched the country's first rubber futures as part of its expansion plans. NBOT is currently running futures trade in soya and mustard products, including oil.

Cofei's move comes following poor volume of turnover during the last 10 months. Volumes have declined sharply due to fall in global coffee prices.

Though coffee prices have recovered since then, the turnover is yet to pick up.

When asked about Cofei's plans to improve turnover, Mr Bidappa said: "We definitely have plans. But we would like to first get our board's approval before going public."

According to Mr Bidappa, Cofei is going ahead with shifting its premises within the precints of the Coffee Board. "We should be in the new premises by April 15," he said.

Initially, Cofei had planned to start afresh from November but subsequently, it decided to postpone its plans. Among Cofei plans to revive volumes are attracting corporate participation and introducing simplified schemes to attract small growers.

Launched in June 1998, Cofei had functioned from the Bangalore Stock Exchange (BgSE) premises besides using its infrastructure for online trading. Since online trading turned uneconomical, it ended its contract with BgSE.

During its peak, Cofei had clocked an average turnover of 200 lots of 600 kg each.

However, since June 2002, the turnover has declined to less than 50 lots.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Malaysia blasts India for higher duty

Palm oil futures seen firm from next week

Cofei mulls joining NSE-ICICI combine