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Mr Anjani Sinha

M.R. Subramani

Chennai, May 10 The National Spot Exchange Ltd (NSEL), a national-level spot electronic exchange, will launch gold and silver contracts in Chennai from May 18, while it will also start similar trading in wheat from Rajkot in Gujarat. It also plans launch of trade in rapeseed/mustard in Rajasthan next week.

NSEL is an arm of Financial Technologies, the majority stake holder of Multi Commodity Exchange, the country’s leading commodity futures operator.

“The spot trading will be online with buyers being jewellery makers and the sellers, bullion dealers. Daily delivery is compulsory in this,” said Mr Anjani Sinha, Chief Executive Officer and Managing Director of NSEL.

Gold will be traded in 1 kg and 100 gm and silver in 30 kg bar.

“The online spot trading helps sellers and buyers overcome the inefficiency in the physical market,” he said.

As regard wheat, Mr Sinha said the spot prices for wheat market would be fixed based on quotes from buyers and sellers. Asked if the spot trading in wheat would attract volumes given the fact that arrivals are almost over in Gujarat, he said at least 30-35 per cent of the wheat grown in the State were still available.

While no payment will be taken for the wheat brought by farmers for trading on the online spot market, the produce would be certified for quality .Warehouse receipts will also be issued so that farmers can avail themselves of loan from banks, if needed.

Buyers from the spot exchange, however, will have to pay Rs 200 for every turnover of Rs 1 lakh.

NSEL, which was launched in October last, is awaiting licence from Tamil Nadu to commence spot trading in various agricultural products. It expects the licence in a month’s time after which different contracts will be offered in different places such as Salem, Madurai and Coimbatore.

“The State Agricultural Commissioner has recommended licence for us to the Principal Secretary of Agriculture,” Mr Sinha said.

Currently, gold, silver and cotton make the most of the Rs 75-100 crore daily turnover of the spot exchange. Besides these, spot online trading also takes place in maize, castorseed and arecanut.

Trading in agricultural products is in units of a bag ranging from 50 to 100 kg.

NSEL plans to begin trading in cumin, coriander, soyabean and paddy soon, Mr Sinha said.

NSEL also plans offering gold in small denominations by approving local brands. In Gujarat, it has begun offering gold in small denominations through a local refinery, Gujarat Gold Centre. In Mumbai, it is set to begin a similar exercise through National Refinery, while it is looking for a local refinery in Tamil Nadu.

More Stories on : Gold & Silver | Derivatives Markets | E-Commerce & E-Business | Commodity Exchanges

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