NCDEX Brings E-Markets to Farmers - Launches Exchange Traded Forwards

NCDEX, the leading commodity exchange, today announced the launch of the Forwards segment on its national level electronic platform. NCDEX is the first and only commodities exchange to offer exchange-traded Forward contracts in the country. The contract will be available from Thursday, 25^th September, 2014.

Named farmer-friendly ``Agrim Sauda’’, this facility will offer the benefits of transparent trade practices and national market reach through registered FPOs (Farmer Producer Organisation). Agrim Sauda will enable all participants in the food and agriculture value chain to widen their reach, create a seamless supply chain that is backed by state-of-the-art technology and protect themselves from counter-party risk. In short, its introduction will lead to an integration of commodity ecosystem leading to a more developed and efficient agriculture market.

Mr. Samir Shah, MD & CEO, NCDEX said “India needs well-functioning agricultural markets where rising incomes improve the lives of millions of farmers and high quality food can reach 1.25 billion consumers, thereby becoming an integral part of inclusive growth transformation. With this initiative, NCDEX is attempting to bring real inclusiveness in the real economy.”

In addition to the farmers, Agrim Sauda will help almost every participant in the segment including processors, exporters, traders and other value chain members. Government procurement agencies can also benefit from this segment. By making price predictability less onerous it is also likely to contribute in the development of storage infrastructure for traded commodities in and around its major producing and trading areas. Agrim Sauda will help increase the geographic reach of buyers and sellers who initially had to incur huge investments in doing the same. With this innovation, a buyer or a seller from one part of the country has the benefit of being able to buy or sell any commodity in any other part of the country.

NCDEX is providing opportunity for physical market players to reduce the counter-party default risk by executing their bilateral trade under the regulatory framework of the Exchange as also the Forward Markets Commission (FMC), without having to give up their comfort of trading in contracts customized to their needs. Unlike the futures contracts wherein the contract specifications are standardised, the ‘Exchange traded Forward contracts’ will allow trading parties to negotiate quantity and also the quality of the underlying commodity, date, place of delivery and settlement price as per their mutual requirements. To begin with, this facility is being offered for Sugar and Maize and will be extended to other commodities going forward.

ABOUT  NCDEX:

As India’s leading online exchange, NCDEX is where customers repose trust. It offers the widest range of benchmark products across agriculture, metals and precious metals. NCDEX brings buyers and sellers together through its electronic trading platform. With a widely held shareholding, it enjoys the distinction of being the only exchange in the country promoted by national level institutions. The institutional promoters and shareholders of NCDEX are prominent players in their respective fields and bring with them institutional building experience, trust, nationwide reach, technology and risk management skills.