The National Spot Exchange, an arm of the Multi Commodity Exchange, will launch its first spot exchange in Ahmedabad next month. The company, which has applied for a license, is likely to get an ad hoc license in another 10 to 15 days.
This will be the first virtual spot commodity exchange in the country. After monitoring the performance of the Ahmedabad spot exchange, the company will launch others in Rajasthan and Maharashtra.
Speaking to Business Standard, Anjani Sinha, managing director and CEO, NSEL, and director, MCX, said, "We are launching our first spot commodity exchange in Ahmedabad next month. We have already applied for a license with the state government, and are likely to get a ad hoc license within a few days. Initially, we will start with one or two commodities such as cotton and castor, and then launch other commodities such as jeera, sesame and groundnut."
Since it may take a few months to receive the license under the amended Agriculture Produce Marketing Committee Act, the NSEL is likely to get a ad hoc license from the APMC, Ahmedabad.
On the delivery of commodities, Sinha said, "We currently have our warehouses in Deesa, Rajkot, Unjha, Kadi and Mehsana. So it will become easier for us to deliver the commodities in these centres. Warehousing will ensure quality, and the exchange will ensure that the farmers get better prices for their produce. They are now used to only local clients, but once they have their commodities online, they will get national exposure and better price realisation."
Other than the farmers, the commodity processing companies would also benefit from the exchange, he said. "Till now the companies which are dealing in processing of these commodities had no access to the spot market. Now when these commodities like castor and cotton go online in the spot they will have easy access to them. For example, companies like Jayant Oils and Jayant Agro, which have headquarters in Mumbai, will have an option to buy the commodity from the spot at the prevailing spot prices."
On the future plans Sinha said, "We will monitor the performance of the first spot exchange in Ahmedabad. Based on the results, we will decide the expansion plans. Other states will also have online spot exchanges. Next in the line are states such as Rajasthan and Maharashtra. However, we cannot give any timeframe as to when we may start spot exchanges there."
