NCDEX to connect farmers to futures trading

India's largest agri commodity exchange -- the National Commodities and Derivatives Exchange says is chalking out several projects to connect farmers with online futures trading in commodities.

"We want to encourage farmers to use the exchange platform to participate in futures trading in commodities and hedging their price risks," NCDEX managing director and CEO PH Ravikumar said.

According to him, commodities have emerged as one of the best investment options in India.

"We believe that futures trading has both direct and indirect economic benefits. Farmers would be in a position to choose their cropping pattern based on the future prices disseminated by the exchange rather than the practice of sowing a particular crop based on current prices," Ravikumar told reporters here.

Saying that that even though there is speculation in futures trading, the NCDEX chief said speculators bring in the advantage of price-discovery.

"The

prices on commodity futures exchanges reflected the fundamentals of demand and supply. Price discovery on an exchange platforms like NCDEX not only helped farmers to take a decision on when to sell their produce, but also the crop to grow in the next season," he pointed out.

Ravikumar said NCDEX has initiated several projects in Gujarat, Andhra Pradesh and Madhya Pradesh to encourage farmers participate in futures trading.

NCDEX is also in the process of establishing a national level collateral management company to take care of issues of warehousing standards and grades as well as facilitate commodity finance by banks.

NCDEX currently offers a bouquet of 45 commodities for trading that include products in agri-commodities, bullion, energy and metals.