Islamabad – The Securities and Exchange Commission of Pakistan (SECP) has embarked upon developing a roadmap for the commodity market in Pakistan so as to facilitate the farmers and provide them with easy access to markets and hedging against price risk.
An expert envisaged “an eventual loss to stand at 0.6 to 0.8 per cent of GDP; So far the cost of floods is estimated at $0.5 billion by Sept 7.” He added that the eventual cost could reach $1.5 to $2bn.
The commission is restructuring the Pakistan Mercantile Exchange Limited (PMEX) to improve its effectiveness. The roadmap revolves around the idea whereby commodity exchanges play a pivotal role in the trading cycle of commodities with particular focus on contracts that involve delivery of local agricultural produce like wheat, rice, sugar, potato and others.
Warehouse receipts can be traded or used as collateral to support borrowing or accepted for delivery against a futures contract. The SECP hopes that their induction will greatly benefit implementation of SECP’s vision for development of a vibrant commodity futures market.
