National Spot Exchange to go live by August end

Written by Commodities Bureau | Mumbai, Jul 30 | Updated: Jul 31 2008, 05:49am hrs
The National Spot Exchange Ltd (NSEL), India's first online spot trading platform, is poised to go live by the end of August 2008. NSEL, promoted by Financial Technologies India Limited (FTIL) and National Agricultural Co-operative Marketing Federation of India (NAFED), on Monday, commenced mock trading on a pan-India basis in the ten agriculture commodities.

"NSEL has received a licence to commence online trading from the Maharashtra, Karnataka, and Gujarat state governments. Besides, it has entered into a MoU with Rajasthan and Madhya Pradesh," Anjani Sinha, MD and CEO, NSEL told reporters.

As of now, more than 500 entities from across the country have evinced interest in membership and 285 of them have already submitted their applications. "About 95 members have participated in the mock trading. It is a replica of the systems and procedures used for live trading. Our aim is to ensure that all our members are ready to commence trading on day one, Sinha said.

In the initial stage, the exchange is planning to launch arecanut, black pepper, castor seed, coriander, cumin seed, cotton (long and medium) gold, rubber, silver, tur and urad for trading. In the next phase, the exchange may start spot trading in other commodities like industrial metals, fertilisers and pesticides.

As of now, agri-commodities will be launched with production areas as delivery centres of Gujarat, Maharashtra, Karnataka, Kerala, and Bihar. Physical delivery will be on the basis of T+1 and T+3, he said.

The spot contracts are market-oriented with a minimum lot size as one quintal for wider participation from marginal farmers to sell their produce. The exchange has signed a strategic alliance with IL&FS for development of agribusiness services and other allied services in the country.