NCDEX Spot Exchange said it has signed an agreement with the Karnataka government to form a joint venture (JV) company to modernise APMC markets in the state by bringing in electronic auctions.
"The company, a 50:50 joint venture between the Karnataka government and NCDEX, is aiming to bring about this reform in up to 10 mandis in the state this financial year," NCDEX managing director and CEO Samir Shah told reporters.
In the initial phase, that is this financial year, the company will cover up to 10 major markets and major commodities and, subsequently, the whole state would be covered, he said.
The company would also link participants in the states markets to the national market and reduce the payment default risk, which is common at present, he added. The JV company would modernise APMC markets in the state by bringing in electronic auctions, providing for grading of the produce and arranging payment to farmers directly.
"Warehousing for scientific storage of the produce, bank funding for the stored produce and other facilities would become possible, once the company becomes operational," Shah said.
While grains and cereals would be the focus of the project initially, and fruit and vegetables would be covered in the last stage of the project, he added.
The NCDEX Spot Exchange is a subsidiary of the National Commodity and Derivatives Exchange, the leading commodity exchange in the country for agricultural commodities.
Exchange secures approval for cotton seed contracts
NCDEX has received approval for cotton seed contracts from the Forward Markets Commission (FMC) and will be introducing the contracts on the exchange soon. We have received the approval for cotton seed contracts from FMC. We will soon launch it on the exchange platform, NCDEX managing director and CEO Samir Shah told reporters. The contract will be for the industrial grade cotton seed, with the basis centre in Akola, Maharashtra, he said. The additional delivery centres will be in Yavatmal, Aurangabad and Rajkot. The minimum ticket size will be R1 and the lot size 10 tonne.