FMC asks bourses to step up volume in non-performing futures

NEW DELHI: Concerned at thin volumes in a few commodities, market regulator FMC has asked the exchanges - MCX, NCDEX and NMCE - to take steps to improve liquidity in those. "We are aware of illiquid futures contracts in commodity exchanges like MCX. We have asked them to improve (liquidity) by encouraging participation," Rajeev Aggarwal, a member of Forward Markets Commission (FMC), said from Mumbai. Both national and regional bourses are struggling with the problem of lower volume in one commodity or the other. But FMC is trying to improve their efficiency, he said. MCX, which has a predominant position in energy and metals, has a poor volume in agri-futures. Of 26 farm commodities, futures trading in 17 having delivery in March, April, May and June showed zero volume, as per MCX data. Similarly, NCDEX has not been generating enough business in non-agricultural commodities and the volume is nil in some of them. Asked if illiquid contracts will be scrapped, Aggarwal said, "The commodity market is still at a nascent stage. The commission will not be in a hurry to scrap illiquid futures contracts, but will try to encourage exchanges by giving ample time to build volumes in illiquid contracts." FMC, however, did not specify how long it would give for exchanges to improve liquidity. (ET)