 "NCDEX's ambitious growth plan")
National Commodity and Derivatives Exchange (NCDEX) says it sees a big opportunity in agricultural products, with the government and regulators both wanting this market to grow.
It had a net worth of Rs 343 crore in 2014-15. Profit after tax was Rs 26.8 crore.
“We plan to strengthen participation across all the three segments available for trading agri commodities in India -- the primary segment where farmers sell their produce in mandis, the secondary segment which is the forward sale by traders and futures where the risk is hedged,” said Samir Shah, managing director.
The central government has announced a national common agri market project. Reserve Bank of India has asked banks to advise their borrowers to hedge their agri commodity price risk on derivative exchanges. NCDEX has the highest market share in agri derivatives, apart from presence in the physical, forward and futures segments.
Following the RBI circular to banks, NCDEX has begun discussion with shareholder banks, Indian Banks Association and National Institute of Bank Management.
The government's latest Economic Survey had acknowledged the e-mandi project of NCDEX's subsidiary, NCDEX E-Markets, a spot exchange. It has modernised and linked 51 wholesale markets of Karnataka, with a common trading platform. Farmers can sell their produce on this electronic platform. NCDEX E-Markets is a 50:50 joint venture with the state government. It will connect the remaining wholesale markets in the state in the coming quarters. The company is in talks with other states for similar projects.
The challenge is to create enough liquidity in all agri commodity contracts. Most commodities are traded on commodity exchanges but there isn't enough depth to help user companies of these products to hedge their risk on the platform.
“Liquidity does not come overnight; a series of steps contribute to the growth of markets. A holistic approach is required. The RBI advisory to banks to encourage large agricultural borrowers to hedge and the FMC-Sebi (regulators of the capital and commodity markets) merger are steps in the right direction,” said Shah.
Multi Commodities Exchange (MCX) has 85 per cent of the market share and is leader in the non-agri segment. The highest volumes in commodity derivatives come from gold trading, an MCX stronghold.
Recently, NCDEX launched two initiatives here, a Gold Now platform and forward trading in gold. The former, it says, “Is the first transparent online market for buying and selling gold. The platform will accept gold recycled in exchange-approved refineries.”
NCDEX gold prices will be acceptable for pricing the proposed gold sovereign bonds, by the graft guidelines on the scheme.
It had a net worth of Rs 343 crore in 2014-15. Profit after tax was Rs 26.8 crore.
“We plan to strengthen participation across all the three segments available for trading agri commodities in India -- the primary segment where farmers sell their produce in mandis, the secondary segment which is the forward sale by traders and futures where the risk is hedged,” said Samir Shah, managing director.
The central government has announced a national common agri market project. Reserve Bank of India has asked banks to advise their borrowers to hedge their agri commodity price risk on derivative exchanges. NCDEX has the highest market share in agri derivatives, apart from presence in the physical, forward and futures segments.
Following the RBI circular to banks, NCDEX has begun discussion with shareholder banks, Indian Banks Association and National Institute of Bank Management.
The government's latest Economic Survey had acknowledged the e-mandi project of NCDEX's subsidiary, NCDEX E-Markets, a spot exchange. It has modernised and linked 51 wholesale markets of Karnataka, with a common trading platform. Farmers can sell their produce on this electronic platform. NCDEX E-Markets is a 50:50 joint venture with the state government. It will connect the remaining wholesale markets in the state in the coming quarters. The company is in talks with other states for similar projects.
The challenge is to create enough liquidity in all agri commodity contracts. Most commodities are traded on commodity exchanges but there isn't enough depth to help user companies of these products to hedge their risk on the platform.
“Liquidity does not come overnight; a series of steps contribute to the growth of markets. A holistic approach is required. The RBI advisory to banks to encourage large agricultural borrowers to hedge and the FMC-Sebi (regulators of the capital and commodity markets) merger are steps in the right direction,” said Shah.
Multi Commodities Exchange (MCX) has 85 per cent of the market share and is leader in the non-agri segment. The highest volumes in commodity derivatives come from gold trading, an MCX stronghold.
Recently, NCDEX launched two initiatives here, a Gold Now platform and forward trading in gold. The former, it says, “Is the first transparent online market for buying and selling gold. The platform will accept gold recycled in exchange-approved refineries.”
NCDEX gold prices will be acceptable for pricing the proposed gold sovereign bonds, by the graft guidelines on the scheme.