Press Trust of India / New Delhi Apr 10, 2009, 15:42 IST
Commodity market regulator Forward Markets Commission (FMC) has allowed exchanges to establish a network of warehouses across the country to reduce transport cost and encourage more deliveries of agri-commodities.
"We have given permission to commodity exchanges to start accreditation of warehouses owned by big producers, processors and manufacturers for bulk commodities only," FMC Chairman B C Khatua told PTI.
The FMC, which took this decision on March 16, said that the exchanges would accredit warehouses to store traded commodities whose output is not less than 1 million tonnes a year in the country.
An exchange official confirmed receiving the direction from the regulator and said this decision would help increase the business as more people would come to the futures platform to take delivery since quality is guaranteed.
"The accreditation of warehouses will reduce the transportation cost for big producers and processors who stay far away from the main delivery centre," FMC member Rajeev Aggarwal said.
He further said that the new norm will help big producers to store bulk commodities in their warehouses.
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