Bourse for farm products soon

Multi Commodity Exchange of India plans to soon launch a spot exchange called National Spot Exchange for Agricultural Produce, according to Deputy Managing Director Joseph Massey.

This will help in the development of strong commodity markets and make India globally competitive within the World Trade Organisation regime, he said.

Massey was explaining MCX's role in integrating the country's heartland (rural India) to mainland (global markets), at "Maharashtra-Vision 2010", an international business seminar here late on Tuesday organised by the Maharashtra Economic Development Council.

Explaining the functioning of a spot exchange, Massey said, "It will be a physical delivery market with a shorter timeframe, compared with futures market."

Trading can be done in delivery units in line with futures markets, and additional "� preferably smaller lots "� are also be available. The exchange has applied for government's approval, he said.

"We need to create an ecosystem which can align various trade bodies and farmers' cooperatives to use alternate market places (like MCX) for the betterment of their members," Massey said.

He said commodity exchanges have developed an organised system where various activities across the value chain such as grading, assaying, storage, transportation and warehousing take place.

"Amendment to the Warehouse Receipt Act can attract flow of credit to rural India," he said.

A strong spot market and developed futures market are complementary to each other and can help in developing a competitive marketplace.

"Under the WTO regime, markets are open to cross-border trade, and if a country has to compete, it should develop its own globally competitive markets," Massey said.

"Coastal Maharashtra, with its strong spot markets and future markets and development of infrastructure and linkages, should emerge as the Rotterdam of Asia," he said.

Rotterdam in the Netherlands is a major trading hub of Europe.

Earlier, Jignesh Shah, managing director and chief executive officer, MCX, said that with globally integrated commodity exchanges, Mumbai can dream to compete with London and New York instead of Hong Kong and Singapore.