Electronic Spot trading
Introduction: Karvy Comtrade Ltd has taken membership of Spot Exchange,
National Spot Exchange Ltd (NSEL) which has been allowed and permitted by
Government of India. NSEL is promoted by NAFED and FT. It is a national level
institutionalized, electronic, transparent spot exchange, which is poised to transform
the rural economy. It is a state-of the-art unique market place providing customized
solutions to various problems faced by the farmers, traders, processors, exporters,
importers, investors and the general mass.
The basic objective of National Spot Exchange is to set up a national level,
electronic, transparent, institutionalized, demutualised market place, where on one
hand, the farmers can sell their produce & on the other, the processors, exporters,
traders & users can buy produce electronically. Mission is to reduce the cost of
intermediation & improve marketing efficiency, thereby raising farmer’s price
realization without increasing the consumer’s price.
General features of Electronic Spot exchange
Delivery-based online trading
Standardized contracts with specified delivery place
All contracts have single-day duration
Outstanding positions at the end of the day will lead to compulsory delivery
Normally the delivery period is 2-8 days
Leveraged products, although the full payment must be done before delivery
Benefit to the farmers
To offer them the best price for their produce by enabling them to access a
national level market.
To increase their bargaining power, as they will get a right to quote their own
selling price, which is not possible in existing APMCs?
To increase their holding capacity by creating a mechanism for warehouse
receipt financing by the banks.
To increase farmers realization by reducing cost of intermediation and
connecting them to actual users directly.
CURRENT TERMS OF TRADE: The agriculture markets, also called as mandis, are
regulated by res