Spot Exchanges

Spot agri exchange takes off TIMES NEWS NETWORK [ FRIDAY, FEBRUARY 11, 2005 01:29:36 AM] NEW DELHI: The Centre made a decisive move towards synergising private players in farm goods marketing by kicking off India’s first National Spot Exchange for Agricultural Produce (NSEAP). The NSEAP is expected to provide referral national spot prices on real time basis for the benefit of farmers. Speaking on the occasion of signing a MoU by Financial Technologies (India) (FTIL), the Multi Commodity Exchange (MCX) and Nafed (National Agricultural Cooperative Marketing Federation) with the SBI as the principal clearing and settlement bank of exchange for the NSEAP, agriculture minister Sharad Pawar said the move was in line with PM’s stress on setting up a national level common market for farmers with the least cost. The introduction of the national level spot market, Mr Pawar said, marked a milestone in agricultural marketing. This would provide adequate financing and the Model Agricultural Produce Marketing Cooperatives Act (APMC) was another step in this direction, he said. As part of the strategy to increase private participation in the farm sector, the Centre is facilitating a law to make Warehouse Receipts a negotiable instrument, to attract lending by banks to the farm sector. Another radical change, Mr Pawar said, was the introduction of the Value Added Tax (VAT) regime in order to increase inter-state trading and for the creation of a national market. Rooting heavily for direct procurement of commodities by major agri-business enterprises from production centres on remunerative prices, Mr Pawar emphasized that electronic linkages have to be created for better efficiency in procurement, along with necessary infrastructure support to settle transactions. In his address, consumer affairs secretary L Mansingh pointed out that the government had removed restrictions in futures trading in various commodities and the integration of spot marketing with futures trading will open up a single commodity market place for farmers.

NMCE to start online spot exchanges in Rajasthan Our Bureau Project's initial cost Rs 25 crore Ahmedabad , Aug. 8 The National Multi-Commodity Exchange of India (NMCE), which just got permission to set up eplatform for spot trading of agricultural commodities in Rajasthan, is ready with the project to rollout such "Online Spot Market Exchanges" at an initial cost of Rs 25 crore at half-a-dozen places in the State by October 2006.

The NMCE Managing Director, Mr Kailash Gupta, said the exchange had applied for starting such spot exchanges in Rajasthan as well as Gujarat. "We have so far received the permission from the regulatory authority for Rajasthan and expect to get it soon for Gujarat too. All set

"This is in pursuance of a communiqué we had received from Forward Market Commission (FMC) about the feasibility of setting up e-platform offering spot prices of agricultural and other commodities, particularly for the government agencies to offer and accept physical deliveries, preferably at the offers below the maximum spot prices," Mr Gupta said. "Initially, we will begin with mustard, mustard seed, fennel seed and coriander, to gradually take up more commodities depending on the market trends," he said in a release here. The project includes providing adequate number of terminals down to taluka (block) headquarters and bigger villages, with training facilities for the target groups in online trading too. NMCE's initiative

The project is as per the Government's latest decision to provide the right facility for online trading in commodities' spot market too, in addition to online trading in futures market soft-launched by NMCE in November 2002.

NCDEX to set up spot exchanges

Special Correspondent Organises awareness programme Spot exchanges will bring down number of intermediaries It will help farmers realise remunerative price for their produce

Kochi: The National Commodity and Derivatives Exchange (NCDEX) plans to launch electronic spot exchanges across the country, says P.H. Ravikumar, managing director and chief executive officer. Talking to reporters on the sidelines of an awareness programme organised by the NCDEX in association with Infarm here on Tuesday, Mr. Ravikumar said the exchange sought permission from seven State Governments to start spot exchanges at a cost of Rs.12 crore to 15 crore. The idea is to have regional warehouses to store the commodities from the farmers and to ensure the best price based on futures trading. In a bid to spread awareness on the benefits of futures trading in commodities, the NCDEX has been organising seminars on opportunities in commodities futures trading and how commodities trading on exchange platform is beneficial to the farmers. The first such seminar was held here on Tuesday. Fr. Mathew Vadakkemuriyil of Infarm said farmers still viewed futures trading suspiciously because of alleged scope for manipulation of prices. The authorities were also wary about launching futures trading in some of the commodities here in the interest of the farmers. However, from a marketing point of view, futures trading could benefit farmers once they were made aware of the mechanism. This would also help the farmers to ensure their

rights with banks and would have a better understanding about how the farmers could avail themselves of loans at competitive interest rates against warehouse receipts. He said commodity exchanges should come close to the farmers. Now traders were controlling commodity exchanges. The trading in commodity futures coupled with the proposed launch of spot exchanges would bring down the number of intermediaries and help farmers realise remunerative price for their produce. They could use both the futures and the spot platform to avoid distress sales, he said.