NCDEX SPOT EXCHANGE (NSPOT)

Spot the future with us

NSPOT: The Leading Electronic Spot

Market

NSPOT is the leading electronic spot market in

India

It is promoted by NCDEX

NSPOT is market leader in all its launched

commodities: Chana, Sugar, RM Seed, Gold and
Silver.

NSPOT is governed by respective state laws and

regulations of spot markets (APMCs) as applicable
for the select commodity.

NSPOT Offerings
Continuous markets: Compulsory delivery based
contracts in

Agriculture: Chana, Sugar, RM Seed,Mustard,

Imported Lemon Tur ,Gubarga Tur and Imported Urad

Bullion : Gold and Silver from Mumbai, Ahmedabad

Metals: Steel Ingots would be launched soon

NCDEX SPOT Advantages

Price Transparency
Timely Payment
Counterparty Risk Mitigation
Wider Network and Geographical Reach
Alternate platform for delivery

Tur Spot Exchange

NSPOT obtained license to start spot exchanges

for various commodities in Karnataka
Spot exchange in Tur launched in January 2010
at Gulbarga
Plans to extend scope to Sedam, Chitapur,
Yadgir etc. in the course of time
Model being rolled out after extensive
discussions with value chain participants
including farmers, traders, commission agents,
brokers, trading corporates, and end
consumers

Current status of Red

gram
o India is largest producer and consumer of red gram
in the world.

Occupies 3.6 million hectare area with production of

2.6 million tonnes.
o

Karnataka holds second position in tur production

occupying 681000 ha. Producing 485000 tones.
o

In Karnataka ,Gulbarga is the potential grower of Tur

holding first rank in the production.

Gulbarga Tur famous for good quality in terms of its

taste.
o

Existing marketing
scenario
o

Farmers sell Tur in the APMC through commission

agents and commissions are in the range of 2-4%.

Farmers pledge their loan against the advances

taken between sowing and harvesting.

Do not get remunerative prices due to lack of

awareness about grading ,sorting, etc.

Contd
o

Lack of marketing information regarding arrivals and price

prevailing in other markets.
Inadequate storage facilities in rural areas.

Inadequate transportation facilities.

Farmers are forced to go for distress sell.

About Proposal
o

To support farmers online spot trading is

proposed by NSPOT

Farmers would bring their produce in the

godowns of exchange and after grading
online trading will be done.

Growers would be able to fix the price of

their produce.

On the basis of warehouse receipt bank will

give 65% of the cost of commodity as loan.

MYRAD
A

NCDEX
SPOT
Farmers(Tur
growers)

TUR
BOARD

Govt. of
Karnatak
a

Bank

TUR SPOT EXCHANGE MODEL

Encourages Farmer deposits by providing them with
transportation, packaging and labour cost on recoverable basis
in colloboration with Tur Board and MYRADA.
MYRADA ,an NGO,aggregates farmer stocks thro its farmer
facilitation centres spread across 12 locations in Gulbarga
District,Karnataka
These stocks are brought to the accredited warehouse of
NSPOT,managed by NCMSL-warehouse service provider
Farmers can avail pledge loan on their deposits thro SBI
11

Once sale is concluded on the NSPOT ,the proceeds will be

Allocation of
Funds by KTAM
to MYRADA

Refund of
Amount
drawn
from
Revolving
Fund A/c

MYRADA
opens a
Revolving
Fund Account

16 Farmers
Facilitation
Centres
(FFC)

Incurs expenditure on
Aggregation of Farmers
Produce
(Like Packing,
Transportation &
Loading / Unloading)

Farmers Lot
are
deposited
on NSPOT
Warehouse
Trades on
NSPOT
12

A/c
reconciliation
& Reporting

Farmerss A/c after

deducting the
expenses towards
packing,
transportation &
loading.

Transfer of Sales
proceeds by the
NSPOT after
adjusting,
transaction and
assaying charges

Business Model- Functioning

Selling Side

The Seller has to first bring in the commodity in

accredited godown at designated warehouse.

Assaying according to NCDEX Spot specifications

The required quantity of commodity stored in warehouse

then needs to be locked in for trade/Sale by the Seller
client or member in the WMS at the NCDEX Spot member
level.

The seller can then sell the commodity equivalent to that

locked quantity or less than that quantity.

All the outstanding sell positions will result into delivery at

the end of the day.

The sell positions can also be squared off

Buying Side

The buyer needs to pay upfront margin to take the

buy position on the Spot platform .
All outstanding buy positions at the end of the day will
result into delivery.
The buyer if desired can square off his position during
the day.
Settlement

The settlement of funds and sales tax if any will

happen on T + 2 (i.e Settlement will take place on
second day after trading day)

Benefit Accrual - Farmers

Price Transparency

Better price discovery mechanism owing to larger

participation

Alternative platform for sale of commodity.

Opportunity for bulk deals.

Reduction in transaction cost

Direct selling of small quantities with reduction in

channel.

Buyer Default adequately compensated

Proper assaying of quality & quantity

Facility of pledge loan thro Banks

Direct transfer of sale proceeds to seller bank A/C on 3rd

Benefit Accrual - Consumers

Price Transparency

Better price discovery mechanism owing to larger

participation

Alternative platform for availability of commodity.

Opportunity for bulk deals with reduction in channel.

Reduction in transaction cost

Direct Buying for small quantities

Seller Default adequately compensated

30 % reduction in market fee-which is at 1.5%

Pledge loan facility for traded stock thro Banks

Assured quality & quantity

Farmer awareness programmes

17

19

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Cost comparison between Traditional and NSPOT trading per Quintal

24

Particulars

Cost in traditional trading

(In Rs.)

Cost in NSPOT trading

(In Rs.)

Transportation /Quintal

50 ( Approx)

30 (Approx)

Weighment & sieving/Q

12( At FFC)

Soot (2kg/Q)

100

Nil

Loading & unloading/Q

10

9.50

Sampling charge
(300gm/Q)
Quality assessment

15

Nil

Nil

1.66

Weighment charge in
warehouse/Q
Transaction charge/Q

Nil

0.40

Nil

Commission (2% on sell)

100

Nil

Tur Board

Nil

Ware house
charge/Q/month
Total

4.50

285.50

74.56

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Contract Specifications

26

Lot size

10 MT after std. deduction of 0.5% with

=/- 5% qty. variation

Packing

100 or 50 kg in sound jute bags

Moisture content

12% max

Damaged//discoloured grains

Up to 5% max

Foreign matter(including dust,sand &

other admixtures)

1% max

Broken seeds

1% max

Ad mixture

0.5% max

Grain Retention

Min 90% on 3.75 mm Sieve

Tick size

Rs.1 per qtl

Quotation base value

Rs. Per qunital

Unit of trading

10 MT (10000 kg)

Unit of delivery

10 MT (10000 kg)

Buyer margin

9%

Validity

3 months from the date of sample

collection

Quality Analysis Report-Sample lots

Lot No

Date

Admixture

Moisture

Foreign
Matter

Damaged

Broken
seeds

Grain
Retention

Village

30/1/2010

0.42

9.1

0.47

3.09

0.74

98.29

Sarsamba

2/2/2010

0.41

9.2

0.73

1.9

0.11

97.21

Kodli

3/2/2010

0.09

9.2

0.24

4.9

0.08

96.29

Sarsamba

6/2/2010

0.3

9.3

0.2

3.29

0.2

92.19

Sarsamba

6/2/2010

0.56

10.2

0.02

0.8

0.18

99.2

gilda`s

10/2/2010

9.9

0.38

1.17

0.16

98.19

Kodli

10/2/2010

0.06

9.2

0.76

1.83

0.27

97.65

Kodli

11/2/2010

0.25

9.8

0.9

5.8

0.5

97.34

Sarsamba

15/2/2010

0.03

9.3

0.35

4.34

0.2

99.16

Sarsamba(si
ndagi)

10

15/2/2010

0.06

9.2

0.4

1.54

0.32

98.76

Sugoor

0.22

9.44

0.45

2.87

0.28

97.43

0.50%

12%

1%

upto to 5%

1%

Min 90% on
3.75mm
sieve

Average

27

Std
Parameter

THANK YOU

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