INAUGURATION OF THE GEOGIT CO-OPERATIVE OFFICE IN KOCHI,
KERALA ON 14TH SEPTEMBER, 2012:
********
It gives me immense pleasure to inaugurate the opening of the GEOGIT Corporate Office in Kochi today. It is a very heartening and proud occasion for two reasons: first, because an Indian Company with a humble beginning has completed 25 years of service to the people of India and abroad, and second, because the beginning of this Company was from the land of Kerala! I extend my heartiest greetings and good wishes to Geojit BNPP on their 25th Anniversary and for this new Corporate Office which is dedicated to the service of the people.
2. It is heartening to learn that starting from a small garage in 1987, Geojit grew over a period of time in terms of number of clients, employees and revenue through hard work and determination and today is a trusted brand all over the country!
3. We have seen a paradigm shift in the commodity and stock trading business with much technological advancement, such as the internet trading and innovation like mobile trading. Commodity and stock trading has markedly moved from the hands of intermediaries to that of investors and has become more transparent. But there is a need to create awareness among the investors so that they can invest responsibly.
4. With two-third of the population depending on agricultural commodities, the relevance of commodity futures trading needs no emphasis. The National Agricultural Policy announced in July 2000 recognized the positive role of forward and futures market in price discovery and price risk management, especially in agricultural commodities. By a notification dated 01.04.2003 prohibition on futures trading was completely withdrawn. The commodity futures trading was started with objective of mitigating price risks faced by the producers and other market participants. The futures prices discovered on the commodity trading platforms act as price barometer to various stakeholders of the commodity supply chains. The Commodity Futures Market in India comprises National and Commodity Specific (Regional) Commodity Exchanges which perform the critical economic functions of price discovery and price risk management. The price signals – futures prices – emanating from the exchange platform indicate the future likely prices of the underlying commodity. The prices discovered on the Exchange are driven by perceptions of supply and demand at a future date.
5. The commodity futures market in India has grown exponentially in the last eight years. The value of trade in this market has grown from Rs. 66,000 crore in 2002-2003 to Rs.181 lakh crore during 2011-12. This growth is an indication of the increasing liquidity, depth and participation in this market.
6. One of the major concerns is to ensure that the farmers who are the major stake holders should derive the benefits of the futures markets. At present use of futures contracts to the benefit of farmers is limited as the farmers lack necessary expertise to enter the futures market. However, the knowledge of futures prices helps the farmers in taking pre-sowing and post harvest decisions and the knowledge of futures prices increases his bargaining power vis-à-vis the traders.
7. The farmers can benefit from futures market only when there are aggregators acting on their behalf to trade on the commodity futures exchanges. There are many cases where farmers have been able to reap the benefits of futures trade through aggregation. Some of the Rubber Co-operative Societies in Kerala are working as aggregators and are participating in the futures market on behalf of their members. These Rubber cooperative societies have successfully brought many small and marginal farmers to the commodity exchanges for price discovery and price risk management. Many Rubber Co-op. Societies have accepted futures market so well that their members/producers are able to avail of bank finance against the warehouse receipts and ‘sell’ Contracts in futures market to meet their major needs. The exchanges and members have to work towards developing aggregation models in other states and commodities to help farmers trade on futures platform for managing the price risks.
8. The Forward Markets Commission has taken various steps to bring out more transparency, fair-play in the market and improving hedgers participation. The increased participation of producers, consumers and others having exposure to physical commodity market will enhance the price discovery process. In this regard the intermediaries like Geojit can play a very important role. They have to augment the efforts of the Forward Markets Commission to create more awareness among the physical market participants to use the futures market.
9. I would like to emphasise that, unlike other financial markets, the commodity derivatives market touches the lives of all citizens of the country, either as producers or as consumers. Hence, price discovery in the most efficient and transparent manner assumes much greater significance in this market. It is especially so since majority of the farmers are small and marginal. The Commodity Market has to perform the duty of ensuring that this market functions most efficiently and transparently and that the prices discovered therein are made available to the multitude of stakeholders.
10. It is, therefore, essential that business institutions involved in commodity/stock broking and marketing must become even more sensitive to the concerns of the people of the country. I am sure, responsible business institutions like the Geojit BNPP will not be found wanting in addressing these concerns. Once again, I congratulate the entire Geojit BNP Paribas team on their 25th Anniversary and for this grand Corporate Office which has become a prominent landmark in Kochi!
Thank you!
KERALA ON 14TH SEPTEMBER, 2012:
********
It gives me immense pleasure to inaugurate the opening of the GEOGIT Corporate Office in Kochi today. It is a very heartening and proud occasion for two reasons: first, because an Indian Company with a humble beginning has completed 25 years of service to the people of India and abroad, and second, because the beginning of this Company was from the land of Kerala! I extend my heartiest greetings and good wishes to Geojit BNPP on their 25th Anniversary and for this new Corporate Office which is dedicated to the service of the people.
2. It is heartening to learn that starting from a small garage in 1987, Geojit grew over a period of time in terms of number of clients, employees and revenue through hard work and determination and today is a trusted brand all over the country!
3. We have seen a paradigm shift in the commodity and stock trading business with much technological advancement, such as the internet trading and innovation like mobile trading. Commodity and stock trading has markedly moved from the hands of intermediaries to that of investors and has become more transparent. But there is a need to create awareness among the investors so that they can invest responsibly.
4. With two-third of the population depending on agricultural commodities, the relevance of commodity futures trading needs no emphasis. The National Agricultural Policy announced in July 2000 recognized the positive role of forward and futures market in price discovery and price risk management, especially in agricultural commodities. By a notification dated 01.04.2003 prohibition on futures trading was completely withdrawn. The commodity futures trading was started with objective of mitigating price risks faced by the producers and other market participants. The futures prices discovered on the commodity trading platforms act as price barometer to various stakeholders of the commodity supply chains. The Commodity Futures Market in India comprises National and Commodity Specific (Regional) Commodity Exchanges which perform the critical economic functions of price discovery and price risk management. The price signals – futures prices – emanating from the exchange platform indicate the future likely prices of the underlying commodity. The prices discovered on the Exchange are driven by perceptions of supply and demand at a future date.
5. The commodity futures market in India has grown exponentially in the last eight years. The value of trade in this market has grown from Rs. 66,000 crore in 2002-2003 to Rs.181 lakh crore during 2011-12. This growth is an indication of the increasing liquidity, depth and participation in this market.
6. One of the major concerns is to ensure that the farmers who are the major stake holders should derive the benefits of the futures markets. At present use of futures contracts to the benefit of farmers is limited as the farmers lack necessary expertise to enter the futures market. However, the knowledge of futures prices helps the farmers in taking pre-sowing and post harvest decisions and the knowledge of futures prices increases his bargaining power vis-à-vis the traders.
7. The farmers can benefit from futures market only when there are aggregators acting on their behalf to trade on the commodity futures exchanges. There are many cases where farmers have been able to reap the benefits of futures trade through aggregation. Some of the Rubber Co-operative Societies in Kerala are working as aggregators and are participating in the futures market on behalf of their members. These Rubber cooperative societies have successfully brought many small and marginal farmers to the commodity exchanges for price discovery and price risk management. Many Rubber Co-op. Societies have accepted futures market so well that their members/producers are able to avail of bank finance against the warehouse receipts and ‘sell’ Contracts in futures market to meet their major needs. The exchanges and members have to work towards developing aggregation models in other states and commodities to help farmers trade on futures platform for managing the price risks.
8. The Forward Markets Commission has taken various steps to bring out more transparency, fair-play in the market and improving hedgers participation. The increased participation of producers, consumers and others having exposure to physical commodity market will enhance the price discovery process. In this regard the intermediaries like Geojit can play a very important role. They have to augment the efforts of the Forward Markets Commission to create more awareness among the physical market participants to use the futures market.
9. I would like to emphasise that, unlike other financial markets, the commodity derivatives market touches the lives of all citizens of the country, either as producers or as consumers. Hence, price discovery in the most efficient and transparent manner assumes much greater significance in this market. It is especially so since majority of the farmers are small and marginal. The Commodity Market has to perform the duty of ensuring that this market functions most efficiently and transparently and that the prices discovered therein are made available to the multitude of stakeholders.
10. It is, therefore, essential that business institutions involved in commodity/stock broking and marketing must become even more sensitive to the concerns of the people of the country. I am sure, responsible business institutions like the Geojit BNPP will not be found wanting in addressing these concerns. Once again, I congratulate the entire Geojit BNP Paribas team on their 25th Anniversary and for this grand Corporate Office which has become a prominent landmark in Kochi!
Thank you!
