Pakistan Mercantile Exchange: Futures contract of paddy rice to be listed

KARACHI: The Securities and Exchange Commission of Pakistan (SECP) on Wednesday said that it has approved the listing of Super Basmati Paddy Rice futures contracts on the Pakistan Mercantile Exchange (PMEX).

The step has been taken to promote electronic trading of agricultural commodities through the platform of PMEX and to protect the interests of participants in the agriculture value chain (farmers in particular), according to a press release.

In August 2015, the SECP had approved red chilli futures contract, which after a successful pilot, was subsequently rolled out on full scale. In the current season, over 1,000 tons of red chilli has been traded through the electronic platform of PMEX.

Benefits of using PMEX platform include quality-tested product, swift payment within 24-48 hours, price transparency and guaranteed delivery and settlement through the exchange’s mechanism.

The SECP is fully geared towards bringing about reforms in agricultural commodity trading by encouraging traders to make use of PMEX platform as a modernised route for buying and selling agricultural commodities in Pakistan, it added.

For this purpose, the SECP has incorporated the concept of agriculture promotion companies in the Draft Companies Bill, 2016, which includes producer and collateral management companies and formulated draft collateral management and warehousing framework to facilitate formation of collateral management company and registration of accredited warehouses. The said framework shall be put forth for public consultation next week.

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