Date:17/01/2007 URL: http://www.thehindubusinessline.com/2007/01/17/stories/2007011702391400.htm

Back MCX arm plans spot trading in natural gas

Pratim Ranjan Bose

Mumbai , Jan. 16

The MCX promoted National Spot Exchange Ltd (NSEL) is planning to hold spot trading in natural gas and agri-inputs. This is apart from the proposed promotion of electronic spot trade in agri-produce.

The natural gas market is fast maturing in India. The slew of discoveries in the recent past and projected sharp rise in supply beginning 2008-09 may make natural gas an widely used source of energy in the country, said Mr Lamon Rutten, Joint Managing Director of MCX.

"We are working on a proposal for floating spot trade on natural gas for quite some time now. However, issues related to delivery logistics are coming in our way," Mr Rutten told Business Line

Meanwhile, NSEL has finalised the modalities of spot trading in agri-commodities. To avoid the complexities related to Agriculture Produce Marketing Control (APMC) Act and promote pan-India trade of agri-commodities, NSEL has decided to create a platform where commodities would be offered for trading after payment of mandi tax.

"We will put up delivery centres across the APMC yards in a State which will offer trading opportunities to the existing APMC commission agents (aratias)," the NSEL Managing Director, Mr Anjani Sinha, told this correspondent.

To encourage farmers to directly sell their produce at NSEL, the exchange will rope in licensed APMC agents. The latter will act as a commission agent for helping farmers to trade their produce after payment of mandi tax, loading handling and packaging charges.

"We are also negotiating with existing forward market commodity brokers to take APMC licenses and open shops at our delivery centres," Mr Sinha said.