National Spot Exchange (NSEL) Turnover At Rs.400 Plus Crores - The Exchange Has Achieved This Feat Within A Record Period Of One Year

National Spot Exchange (NSEL), an electronic market place for spot trading in commodities, recorded a delivery based turnover of Rs.411 crores in the month of February 2010. The total volumes includes Castor seed valued at Rs.215.61 crore, Cottonseed wash oil valued at Rs.34.90 crore, Gold at Rs.126.50 crore, Silver at Rs.26.30 crore, Cotton( bales) at Rs.6.17 crore and castor oil at Rs. 0.89 crore, apart from some volume recorded in Urad and Tur.

 Established with a mission to reduce the cost of intermediation by enabling farmers to sell directly to processors and exporters, NSEL has got overwhelming response from both farmers as well as corporates. Trading through NSEL results into saving in cost of procurement for the buyers and higher price realization by the farmers. Presently NSEL operates in 11 states in 23 commodities having 49 delivery locations across the country through 194 commodities contract. As of now total numbers of NSEL members are 310, which includes large broking houses such as Karvy, Kotak, Religare, SMC, Globe capital, Bonanza, Angel, etc.; some large Government companies such as MMTC, PEC, Cotton Corporation of India, NAFED, etc. and so on.

During the month under reference, Hindustan Zinc sold 10.35 MT of silver worth Rs 25.53 crores through NSEL platform. This was sold through forward auction mechanism conducted by NSEL. This includes sale of 6.15 MT of silver on Ex Jaipur basis and 4.2 MT of Silver on Ex Ahmadabad basis.

NSEL has established itself as the market leader in conducting electronic spot trading by working closely with the market participants, understanding their requirement and by providing customized solution to their trading needs. Recently, NSEL in association with MCX has designed Barley and Maize contract which is fungible at both NSEL and MCX. It means the commodity purchased from NSEL could be delivered on MCX and vice versa. Fungibility allows the market participants to meet their physical market requirement at NSEL along with facilities of hedging at MCX. The contracts are available for trade between 10am and 6pm from Mondays through Fridays and from 10am to 2:00 pm on Saturdays. The price of the contract is ex-warehouse basis - inclusive of all expenses.

  Mr Anjani Sinha, MD & CEO, National Spot Exchange said “ It is a unique market place, where both buyers and sellers are equally happy to trade. While sellers realize higher price, buyers save in cost of procurement. This has been made possible by us by improving marketing efficiency and reducing cost of intermediation.”

NSEL has its presence in Maharashtra, Delhi, Rajasthan, Bihar, Gujarat, Madhya Pradesh, Karnataka, Andhra Pradesh, Tamilnadu, Kerala and Orissa with more than 194 active standardized contracts for Arecanut, Barley, Bajra, Castor Seed, Castor Oil, Cotton bales, Cotton Seed Wash Oil, Lemon Tur, Maize, Urad, Yellow Peas, Soyabean, Wheat, Groundnut, Guar seed, Chana, RM seed, Jeera, Guargum, RBD Palmolein.

During the calendar year 2009, National Spot Exchange handled deliveries worth Rs. 2550 crores with participation of around 14000 farmers. The cotton contract which went live in the month of February ’09 saw a record turnover of Rs.1135.59 crore with delivery of more than 9 lac bales of cotton last season.