000643 Italian Grains, Pork to Trade on Internet

Rome - Cereals, paddy rice and pig meat will trade on Internet site in Italy's first electronic exchange for agricultural commodities, beginning in September. Project officials said 35 chambers of commerce had backed the project representing regional commodities exchanges across the country, including Milan, a leading cereals bourse, and Mantova, Italy's main pig meat market.

“If Internet trading proves a success, traditional floor exchanges could be substituted in 18 months to two years,” Annibale Feroldi, director of Meteora SpA and a designer of the project, said.

Traders wishing to exchange agricultural commodities online will have to register at the site and, if their applications are approved by a regional chamber of commerce committee, they will receive passwords enabling them to submit bids and offers.

The traders can choose the regional exchanges on which they wish to trade, and can select prices at origin or delivery.

Once a trade is executed, the buyer receives a contract by e-mail identifying the seller, and vice-versa. No one else in the market knows who the buyer and seller are.

Meteora SpA, set up by the 35 chambers of commerce, will set minimum lots for transactions in each commodity. Prices will be posted daily online.

Italian grain traders predicted a slow start to online trading as many small companies were not yet ready for such a big shift in trading practices.

“The problem is to convince people to link up to the network,” said Mariano Cunietti of Cunietti Cereali in Alessandria in northern Italy. “Not many firms are ready. It needs time.”

European grain traders say that EU states are moving toward an online grain marketplace at different rates, with Britain and France leading the way, and Italy and Spain lagging behind.

“The New Economy for agricultural commodities could be very important,” said Danilo Longhi, president of Unioncamere, which represents Italian chambers of commerce.

“If we are not at the threshold of change, the world will change without us,” he told a presentation of the Web site, which is already running, although trades are not yet authorized.

Trading is due to begin in September after traders submit online registration applications during the summer.

Presently, agricultural commodities ranging from cereals and paddy rice to livestock and olive oil are traded at weekly regional floor exchanges in Italy.

Enrico Ferrario, president of Milan cereals exchange, said he strongly backed the project because online trading was the way forward for agricultural commodities.

Online Trading Brings Transparency

Francesco Bettoni, president of Meteora SpA, said trading on the Internet would create a more transparent market and would have the same regulations as those used today to guarantee delivery of physical goods after a transaction.

Feroldi said Meteora SpA was targeting 1,300 accredited traders nationwide and 30 billion lire ($14.75 million) in turnover in the first year of activity.

If the site proves a success, more agricultural commodities will be added.

Meteora SpA was designing an English language facility that would enable traders working abroad to buy and sell Italian agricultural commodities online, Feroldi said.

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