Date:25/08/2006 URL: http://www.thehindubusinessline.com/2006/08/25/stories/2006082500271300.htm

Back New spot exchanges on anvil

Pratim Ranjan Bose

Kolkata , Aug 24

The National Spot Exchange for Agriculture Produce (NSEAP) plans to roll out its agri-commodity spot market in Kerala and Rajasthan by October this year. NSEAP is a joint venture between Multi Commodity Exchange (MCX), National Agricultural Cooperative Marketing Federation of India (Nafed) and Financial Technologies group (FTIL).

e-platform

The spot market will be on an electronic platform and can be participated in from across the country. This is in contrast to the existing system, whereby, only `Kuchha-aratias' (commission agents of the `pukka aratia') participate in the auction monitored by an APMC official.

According to sources, NSEAP has already firmed up the necessary arrangements with both the Kerala and Rajasthan governments to start the spot markets in a host of major agri-commodities, commodities including guar, chana, mustard seed, wheat and others produced in these two states.

Logistic support

NSEAP was also negotiating with West Bengal, Madhya Pradesh, Delhi and Maharashtra for launching the spot market, but not much headway has been made so far.

State Bank of India is being roped in as the clearing-house. National Bulk Handling Corporation (NBHC), a national warehousing and supply-chain company, will provide the logistics support for handling agricultural commodities.

Both FTIL and MCX did not respond to queries from Business Line on the issue. FTIL is a stake-holder in both MCX and NBHC.

According to sources, the spot market would create relevant national price benchmarks for the agri-futures market. Accordingly the risk of price rigging by speculative interests at the futures market would be minimised.

MCX and NSEAP have already rolled out commodity information centres at various locations to disseminate the spot and futures market prices for agri-commodities on real time basis.