NCDEX looks to upgrade APMC markets

Commodity exchange NCDEX today said it was in talks with various state governments for upgrading Agricultural Produce Marketing Committee (APMC) on a build-operate-transfer (BoT) basis. 

Such an upgrade programme will be implemented by the NCDEX Spot Exchange (NSpot), a subsidiary of NCDEX, through a public-private partnership under which NSpot will operate the market for 10 years and then hand over to the mandi. 

“We have submitted a proposal for upgrading APMC markets in Rajasthan, Karnataka, Maharashtra and Madhya Pradesh on a build-operate-transfer basis,” NCDEX Spot Exchange Executive Vice-President Rajesh Sinha said. 

He said the company had earmarked a budget of '1 crore for upgrading each one of these markets. 

“We would equip them with an electronic exchange and these would also be linked with others in different parts of the country, thereby creating a nationwide data bank for agricultural produce in the country,” Sinha added. 

Asked about the total investment involved, Sinha said in the next five years the company was expected to spend around '100 crore on various upgrade schemes. 

NSpot, which came into existence in 2008, is a delivery-based spot exchange market. During the first half of the current financial year, it has traded more than 35,000 metric tonnes of food grains. Commodity-wise, NSpot has seen the highest volume of trade in pulses and steel during the current financial year. 

The NCDEX subsidiary has presence through 100 centres across 15 states and more than 500 farmers have benefitted from the services of the company. NSpot does not charge farmers or sellers for the services provided and their revenue comes primarily from the buyers. 

NSpot has tie-ups with banks, logistic companies and farmers and is reinventing itself to improvise its electronic trading platform. It has changed its membership process, clearing and settlement mechanism and worked on easy access and direct partnership for smaller players on its trading platform. 

It is building its operations on multiple price delivery and trading mechanism, settlement assurance and counter-party risk management and increasing access to farmers, aggregators, whole sellers and retailers. 

NSpot will also venture into soyabeans in the near future, however company officials declined to give a definite timeline.