AP Markfed to sign pact with Geojit Commodities

The Andhra Pradesh State Cooperative Marketing Federation (AP Markfed) will soon enter futures trading in maize and turmeric with online forward exchanges. The federation plans to sign a memorandum of understanding (MoU) with the Kochi-based Geojit Commodities, a subsidiary of Geojit Financial Services.

"We held discussions with Geojit Commodities and worked out modalities for evolving a trading system and will sign the MoU by this month-end. Once we get the PIN number from Geojit for trading, we expect the project to be operational by April first week," Ponnam Prabhakar, chairman of AP Markfed, said.

"Our idea is to provide farmers, who have been selling their produce in the open market, access to the electronic trading platform to realise better prices and allow hedging the maize and turmeric production. We are initially investing around Rs 10 lakh in this initiative," he said.

AP Markfed, which procures around 5 lakh metric tonne maize annually, plans to leverage its network of 2,900 primary agricultural cooperative credit societies and 22 district cooperative marketing societies, covering over 5.5 lakh farmers across the state, for its futures trading initiatives.

"Currently, the price of maize is abnormal. While the minimum support price (MSP) is at Rs 540 per quintal, the market price has been hovering between Rs 700 and Rs 750. The April-May futures for maize is between Rs 740 and Rs 750. Keeping in view the fluctuating prices, we have decided to operate in two ways "" on a delivery-based model or square up prices "" whichever is favourable and advantageous to the farmers," Prabhakar said. During 2005-06, AP Markfed procured 3.78 lakh metric tonne maize valued at Rs 195 crore under MSP and in rabi 1.86 lakh metric tonne valued at Rs 125 crore. During the current year, since the rate is high and farmers are getting the benefit of higher prices, it has not taken up procurement under MSP.

AP Markfed has also started procurement of turmeric from the Nizamabad marketyard from March 21. In the last two days, it procured 150 quintals of turmeric at a premium of Rs 2,200 and Rs 23,00 per quintal against the market price of Rs 1,800 and Rs 2,100.