KARACHI: First sugar futures contract at the private sector commodity exchange commenced on Tuesday with a volume of 10 metric tonnes.

Pakistan Mercantile Exchange Limited (PMEX) announced the commencement of trading, said PMEX Managing Director Samir Ahmed. PMEX has currently three contracts in the months of March, April and May 2012 and this futures contract launch marks a big step forward in the domestic commodities portfolio of PMEX, he added. 

First trades were done in the February contract, soon after the activation of the contract this month, the first trade in this contract also took place and has reached expiry also, Ahmed informed. 

PMEX Sugar Futures are deliverable contracts. Trading unit for the contract is 10 metric tonnes. Primary advantage of the contract is to provide market participants with opportunities to trade and hedge over a transparent platform, he said. Millers, processors and traders get the superior advantage of PMEX settlement guarantee mechanism whereby participants can eliminate counter party risk from their trading. He said, “Over the next five years PMEX will focus on developing domestic agricultural markets. The main objective will be to initially list all the major domestic agricultural products on the PMEX.” 

In order to achieve the objectives set out, PMEX is planning to open offices near the major agricultural zones of the country for easy access and trust building to take place between the exchange and the agricultural stakeholders. The initial plan is to open four offices during 2012 in the approved areas, he added. This will be followed by an extensive marketing plan to create awareness of the immense benefits that an active futures market offers for growers, consumers, traders and processors of agricultural commodities in Pakistan, he added. He said the intention was to follow best international practices in terms of transparency, fairness and open access so that all players in the value chain benefit equally. 

PMEX will continue to follow the tight risk management procedures and controls that it has pioneered in Pakistan and that have stood it in good stead, especially in recent times of immense volatility in the international markets, he maintained. The PMEX is already dealing futures contract in gold, rice, silver, crude oil, palm olein and Kibor.

PMEX is Pakistan’s first and only technology-based commodity and futures exchange. It is licensed and regulated by the Securities and Exchange Commission of Pakistan. Its shareholders are National Bank of Pakistan, Pak Kuwait Investment Company, Zarai Taraqiati Bank and the three stock exchanges of the country. razi syed

Courtesy DailyTimes

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