NMCE is recognised as an exchange for plantation commodities and spices. But the government banned futures trade in pulses, tur, urad, wheat and rice. Top commodities on NMCE include pepper, rubber and cardamom.

The reasons were not clearly spelt out, but understood to be the rampant speculation in these commodities, resulting in an increase in the open market prices of these commodities.

India is traditionally known for its leadership in agriculture commodities. For the futures market, a hedging mechanism in agri commodities was important.

Meanwhile, one of NMCE''s founders, Neptune Overseas Ltd., is looking to sell its 25 per cent stake, the source said.

Central Warehousing Corporation, another promoter, owns 26 per cent. NMCE''s other promoters include National Agricultural Cooperative Marketing Federation of India, Gujarat Agro-Industries Corp. Ltd., Gujarat State Agricultural Marketing Board and National Institute of Agricultural Marketing.

Sources said BSE has approached the commodity futures market regulator, the Forward Markets Commission (FMC), which must approve any deal. BSE officials, however, were not immediately available for comment.

Investment bank Goldman Sachs had earlier picked up 7 per cent stake in country''s second largest commodity exchange, National Commodity and Derivatives Exchange Ltd.