NSEL ropes in Nafed, PEC as members

Financial Technologies-promoted National Spot Exchange (NSEL), the country’s first online platform for spot trading in farm and industrial commodities, has roped in the National Agricultural Cooperative Marketing Federation (Nafed) and Projects Equipment Corporation (PEC) as its members and these agencies are using the exchange platform to sell imported pulses.

“These government agencies were earlier using the tender route alone to sell pulses, where only bulk buyers could participate since the quantity on sale was in thousands of tonnes. However, the exchange provides an opportunity to buy a quantity as small as ten tonnes,” said Anjani Sinha, managing director and chief executive officer of the exchange. The daily volume in pulses trade is 2,500-3,000 tonnes.

So far the exchange has launched trading in cotton, urad, tur, guarseed, gold and silver. Nafed is also in talks with the exchange for using the latter’s platform to sell the cotton that it procures under price support schemes. Corporates like Glencore and Reliance Retail are also trading at the exchange. The exchange has been granted permission for trading in farm commodities in Rajasthan, Madhya Pradesh, Gujarat, Maharashtra and Karnataka. Licences from states like Punjab and Haryana are in the pipeline.

The exchange is looking forward to launch trading in commodities like wheat, soybean, maize, coffee, rubber, spices and certain other commodities. “We will launch trading in such commodities for which the market is already developed and trading interest is high,” he added. Inaugurated in mid-October, the exchange already has 320 members. The daily turnover of exchange is in the range of Rs 10-15 crore. “With the gradual launch of more commodities, the turnover is expected to witness a sharp increase,” Sinha said.

Apart from traders and processors, the platform can also be used by farmers to sell their produce. A farmer can either quote his price if he wants to sell his produce on the same day or store it in the exchange warehouse for a better price recovery later. The quoted price will be available to members at their terminals and members can make purchases online.

“In case, a farmer wants to sell his produce the same day, he can do it without paying any fee. If he wants to store the produce, he would be required to pay the applicable storage fee,” said Sinha. The exchange charges a transaction fee of Rs 10 on a turnover of Rs 100,000 from both the buyers and the sellers.