| NSEL expects to obtain the licence this month. The e-market status will facilitate the exchange to start spot online countrywide trade in agri commodities. |
| Explaining the genesis of the spot exchange, Anjani Sinha, managing director and CEO of NSEL, said spot trade through mandis recognised by the Agriculture Produce Market Committee (APMC) would continue despite the online trade facilitation. But given the fact that more options would be available, farmers/sellers would have opportunities for better price realisation for their output, Sinha said. |
| "Spot trade through mandis and electronic platform will complement each other. But some basic problems faced by farmers while selling goods in APMCs will be solved in case of electronic markets," he added. |
| In APMCs, farmers do not know the prevailing prices when they bring their produce from their villages. Once they reach a mandi, they are hard pressed to sell at whatever the prevailing price is. They need to wait till their goods are sold. Distress sale is likely to persist in case goods are not sold within the expected time, resulting into a loss to them. |
| In case of the spot online trade, farmers can know the price before bringing goods to the exchange warehouse. They can sell online in case they are computer literate, or else they can sell through a broker/sub-broker of the exchange. |
| They can also deliver goods at the specified warehouse after executing the sale electronically. There is no fear of distress sale in this case as farmers will have the option to watch out for the current prices throughout the country and can decide on deals only if prices are favourable to them. |
| Sinha said through the e-market licence, the NSEL is going to be recognised as an APMC, which will be licensing to traders and big farmers to procure agricultural goods from farmers directly at higher remunerative prices and then sell them to big corporate consumers. "Our list of participants will include the big corporates and retail giants also," he added. |
| Gujarat being a hub of agri commodities, including oilseeds, the NSEL is planning to offer spot trade for groundnut kernel, cotton, cottonseed and castorseed at important arrival centres across Gujarat. The exchange is also aiming at Rajasthan, where it is planning to facilitate spot trade of guarseed, gram and mustard. |
| Maharashtra, Tamil Nadu, Uttar Pradesh and West Bengal will be the other emerging destinations for the exchange to expand its activities. The exchange is planning to restrict itself to those commodities which are produced in the country in large quantities as the narrow commodities with limited output will not offer good business potential. |
| "Initially, we are targeting 5-10 per cent of the physical market size, which will gradually improve as the time advances," said Sinha. |
Top Section
Explore Business Standard