PMEX looks for integration with global market

For linkages, automation and adoption of best practices are a must

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ISLAMABAD:

Pakistan Mercantile Exchange (PMEX) Chief Executive Officer Khurram Zafar said on Tuesday that he was giving priority to integrating the local market with the global competitive market through automation and digitisation in the domestic supply chain.

Talking to APP, the CEO said that modernisation was necessary to connect Pakistan's markets with the global arena and to improve the export potential. "It will require the adoption of best practices like commodity grading and standardisation, on which the international buyers rely." He said that PMEX wanted to introduce innovation in the agricultural and commodity markets to make them more efficient, improve price discovery and reduce wastage.

"We are envisioning a future where the currently fragmented commodity markets seamlessly integrate into a national trading platform that brings down the cost of intermediation, enhances price discovery and allows traders to easily acquire financing against their commodities," the CEO said.

Commodity futures are derivative contracts in which the trader agrees to buy or sell a specific quantity of a physical commodity at a specified price on a particular date in future to hedge against price risks. "Derivatives are investment contracts that derive their value from the price of another asset, typically called the underlying asset, and currently PMEX is the only regulated exchange in Pakistan that can issue and trade these derivatives," Zafar said, adding that the exchange had registered a trading volume of around Rs3,800 billion so far in the current fiscal year.