The e-linking wave is all set to sweep the commodity segment. The move by the National Spot Exchange for Agriculture Produce (NSEAP) and Multi Commodity Exchange of India (MCX) to bring about the Next Green Revolution by electronically linking APMC (Agricultural Produce Market Committee) wholesale markets is being eagerly awaited by the trading community.
The project, which was launched on a pilot basis in Maharashtra, will be introduced across the country after its completion. Its a welcome move... traders and farmers will benefit from this system. As buyers and sellers interact directly, middlemen can be avoided. It will result in better price discovery, said a senior official of Bombay Sugar Merchants Association.
NSEAP and MCX launched Indias first ever Commodity Suchana Kendra TM, a knowledge centre of commodities that gives details on spot and futures market, price and information on fundamentals, at the APMC market in Navi Mumbai in June this year. The centre displays spot and futures commodity prices on a real-time basis.
NSEAP plans to set up Commodity Suchna Kendras in all APMC markets, linking all the agricultural market players over a period. It would also help in linking the support infrastructure from a single point access, thereby enabling the users to get all the assistance required for buying, selling, storing, transporting and payment of commodities.
For example, if a Shimla-based trader wants to buy chillies grown in Guntoor in Andhra Pradesh, he can use the data displayed by the kendras and take optimum advantage.
Another analyst compared the success of ITCs e-Chaupal experiment with the Suchana Kendras. The firm procures commodities from various parts of the country through its chaupals. For instance, if the firm is buying soyabean, the buying price, transport, insurance etc are displayed on a screen at the local mandi.
e-Linking would be beneficial for both spot and futures trading.
In the first phase of implementation, the electronic platform will disseminate real time spot and futures prices to the traders in these markets. In the second, the network established by NSEAP and MCX will be used by farmers, co-operatives and intermediaries in the APMCs for trading in commodities.
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