National Spot Exchange Limited (NSEL), promoted jointly by Financial Technologies group and Nafed, on Wednesday started its online spot trading operation by launching its first agri-commodity, roller ginned cotton.
Roller ginned cotton is the first agri-commodity in the country that is launched on the national electronic spot exchange platform. Apart from raw cotton, the exchange also launched spot trading in gold and silver. On Wednesday, raw cotton contract was traded at Rs 22,000 per candy.
“Raw cotton is the first agri-commodity that will be traded on the national electronic spot platform. It is Pre-certified cotton bales Mumbai delivery contract and the trading lot will be 100 bales,” Bhavik Mehta, vice-president (business development) NSEL told FE.
As per the quality specification, only roller-ginned cotton with minimum 29 mm staple length will be permitted and, not the saw ginned cotton. Trading timing will be 10 am to 6 pm. Delivery unit is 100 bales.
“Since it is a compulsory delivery-based contract, any buyer or seller having open position at close of the trading session on the same day must result into compulsory delivery and delivery allocation will be done at client level,” Mehta said. Delivery will be made at the exchange designated warehouse in Mumbai. In case, there is simultaneous default by seller and buyer (at client level), then exchange will auction/cover the net quantity. Exchange will impose penalty of 1% on each defaulting parties. The charges will be levied at the rate of Rs 4,000 per lot of 100 bales for actual deliveries.