Commexes aim for a spot kick
The race is on among the three major national commodity futures exchanges - MCX, NCDEX and NMCE - on launching the country’s first national commodity spot exchange.
By Narayan Bhatt, TNN |
AHMEDABAD: The race is on among the three major national commodity futures exchanges — MCX, NCDEX and NMCE — on launching the country’s first national commodity spot exchange.
All the three are planning to begin their first spot operations in Rajasthan in December or January next year. Guar seeds, chana, rape seed, mustard seed and jeera are going to be among the commodities to first start trading on these spot exchanges.
The National Commodity and Derivatives Exchange (NCDEX), promoted by ICICI Bank and NSE, are planning to begin its spot operations in Rajasthan sometime in December through its wholly-owned subsidiary NCDEX Spot Exchange.
“We have got permission from the Rajasthan government and our spot trading will begin with chana, guar seed, jeera and mustard seed as these are best suited to the state,” said Narendra Gupta, chief business officer at NCDEX. Rajasthan will be followed by West Bengal for the next spot commodity operations.
The Ahmedabad-headquartered National Multi-Commodity Exchange (NMCE) is also planning to begin its spot commodity operations in Rajasthan in December. “We have yet to incorporate the company, but that would take only a couple of days,” says Kailash Gupta, MD of NMCE.
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It has got permission from the state government and is planning to commence spot operations in rape seed, mustard seed and guar seeds. The Multi-Commodity Exchange of India (MCX) has set up the National Spot Exchange along with its parent company Financial Technologies India and the National Agricultural Co-operative Marketing Federation of India. Anjani Sinha, MD and CEO of the National Spot Exchange, told ET that they plan to begin operations in Rajasthan and Gujarat in January, and then go to Madhya Pradesh. “In Rajasthan, we will commence spot operations in mustard seed and some other agri-commodities, while in Gujarat we will begin with jeera and castor. In February, we plan to introduce spot trading in wheat,” says Mr Sinha.
All the three futures exchanges have selected Rajasthan as it is one of the few states which have amended the Agriculture Produce Marketing Committee (APMC) Act, allowing farmers to sell their produce outside regulated market yards (better known as mandis). Gujarat is expected to follow suit soon.
All the upcoming spot commodity exchanges will face a severe constraint on the warehousing front, which is essential for increasing the trading volumes of any spot commodity exchange. They will all have to initially depend on the Central Warehousing Corporation, FCI and the warehousing network of each state.
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