Commodity Online
MUMBAI : As part of the national tie up, which ultimately seems to replace the traditional APMC’s, Financial Technologies-promoted National Spot Exchange (NSEL) has tied up with yet another firm for its expansion across the country.

This time it is Ludhiana Commodities Trading Services for Punjab and Haryana. NSEL is on the verge of completing a nation wide tie up with various agencies and is likely to be a parallel body to Agriculture Produce Market Committees.

The only difference is that the NSEL promoted alliances will work towards a national platform for spot market mechanisms and is likely to bring in the much needed reforms and uniformity in spot markets.

India’s Futures market – regulated by Central government body, FMC – is far away in both communication and interaction with the spot market bodies – APMC – perceived as a farmer body but more or less a political body - that controls the mandis.

Since there is no uniform body for spot markets, the prices are fragmented across different markets. Even in a single market, the prices differ and therefore the exchanges – which needs spot prices for arbitrage – have put their own mechanism in place to determine the spot market prices.

But a few brokers say the spot market prices provided by the exchanges are no where to be heard in the entire market. More so, all the three major exchanges keep different prices for the same quality, same market commodities. Some broking firms keep their own prices putting investors to great difficulties.

NSEL is India’s first online platform for spot trading in farm and industrial commodities. If it can expand and replace the traditional mandi markets, the exchanges will have a place to rely on spot market prices.

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