Ctg bourse, Indian firm sign MoU for commodity exchange

The Chittagong Stock Exchange (CSE) yesterday signed a memorandum of understanding with India's Multi Commodity Exchange (MCX) to launch Bangladesh's first-ever commodity exchange.

A commodity exchange is a legal entity that determines and enforces rules and procedures for trading standardised commodity contracts and related investment products.

PS Reddy, managing director and chief executive officer of MCX, and Ghulam Faruqe, acting managing director of CSE, signed the deal at Radisson Blu Dhaka Water Garden.

At the event, Commerce Minister Tipu Munshi said he realised the importance of the commodity exchange as the recent commodity price fluctuations made him unhappy.

"The solution was in the commodity exchange. So, It's a timely decision," he said, adding that it is a big step in the development journey of Bangladesh.

In 2003, MCX became one of the first exchanges to open in India. It provides a platform for price discovery and risk management across varied segments, including industrial metals, energy and agricultural commodities.

Rural farmers will get a fair price with the exchange, which will help the agricultural sector to be developed, CSE Chairman Asif Ibrahim said.

A committee will be formed to ensure fair prices, so the consumers also will be benefited, he said.

A Chattogram-based conglomerate, which is establishing a big warehouse in the port city, has expressed its interest to collaborate with the CSE that will help in developing the commodity exchange, he added.

The exchange will help the economy to go forward as it will ensure good price for farmers and reduce the price volatility, said Bangladesh Securities and Exchange Commission (BSEC) Chairman Prof Shibli Rubayat-Ul Islam.

The farmers will know the price of their product even before harvesting it and the traders will know from whom they can buy, he said.

"Our supply chain system will be improved, cold storage system will be developed so a new horizon of development will be materialised with the journey."

The BSEC helps the CSE in every step to make the exchange working, Islam said.

"Everything will not happen tomorrow but we hope it will be materialised soon."

Modernisation of commodity storage and price discovery are important for the revolution of an economy and the commodity exchange will help in this regard, said Indian High Commissioner Vikram Doraiswami.

It would help in utilising the resources in the best possible way, he said.

"You don't want price volatility. The MCX will help in ensuring fair prices."

Bangladesh has the potential to be a giant like Singapore and the commodity exchange is a step towards that goal, the high commissioner said. "This is a historical moment for Bangladesh."

Efficient management, timely distribution and maintaining quality of commodities are a big challenge in the region and the commodity exchange will work to do it, he added.

Shaikh Shamsuddin Ahmed, a commissioner of the BSEC; Emdadul Islam, a director of the CSE, and Md Ghulam Faruqe, acting managing director of the CSE, also spoke at the event.