NCDEX SPOT EXCHANGE (NSPOT)
Spot the future with us
NSPOT: The Leading Electronic Spot Market
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
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
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
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.
o
o
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Gulbarga Tur famous for good quality in terms of its taste.
Existing marketing scenario
o
Farmers sell Tur in the APMC through commission agents
and commissions are in the range of 2-4%.
o
Farmers pledge their loan against the advances taken
between sowing and harvesting.
o
Do not get remunerative prices due to lack of awareness
about grading ,sorting, etc.
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Contd…
o
o
Lack of marketing information regarding arrivals and
price prevailing in other markets.
Inadequate storage facilities in rural areas.
o
Inadequate transportation facilities.
o
Farmers are forced to go for distress sell.
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About Proposal
o
To support farmers online spot trading is
proposed by NSPOT
o
Farmers would bring their produce in the godowns
of exchange and after grading online trading will
be done.
o
Growers would be able to fix the price of their
produce.
o
On the basis of warehouse receipt bank will give
65% of the cost of commodity as loan.
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NCDEX
SPOT
MYRADA
Farmers(Tur
growers)
TUR
BOARD
Govt. of
Karnataka
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
Once sale is concluded on the NSPOT ,the proceeds will be adjusted
against pledge loan and other expenditure and balance will be
transferred to beneficiary A/C
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Allocation of Funds
by KTAM to
MYRADA
Refund of
Amount
drawn from
Revolving
Fund A/c
MYRADA opens
a ‘Revolving
Fund Account’
A/c
reconciliation &
Reporting
Farmers’s A/c – after
deducting the expenses
towards packing,
transportation &
loading.
16 Farmers’
Facilitation
Centres (FFC)
Incurs expenditure on Aggregation
of Farmer’s Produce
(Like Packing, Transportation &
Loading / Unloading)
Farmers Lot
are deposited
on NSPOT
Warehouse
Trades on
NSPOT
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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 day of sale
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
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Cost comparison between Traditional and NSPOT trading per Quintal
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Particulars
Cost in traditional trading
(In Rs.)
Cost in NSPOT trading
(In Rs.)
Transportation /Quintal
50 ( Approx)
30 (Approx)
Weighment & sieving/Q
6
12( At FFC)
Soot (2kg/Q)
100
Nil
Loading & unloading/Q
10
9.50
Sampling charge (300gm/Q)
15
Nil
Quality assessment
Nil
1.66
Weighment charge in
warehouse/Q
Transaction charge/Q
Nil
0.40
Nil
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Commission (2% on sell)
100
Nil
Tur Board
Nil
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Ware house charge/Q/month
4.50
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Total
285.50
74.56
300
285.5
COST DIFFERENCE: 210.94
250
Total cost in RS
Cost in traditional
trading(Rs.)
200
Cost in NSPOT trading(Rs.)
150
100
74.56
50
0
Cost in traditional
trading(Rs.)
Cost in NSPOT
trading(Rs.)
Type of trading
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Contract Specifications
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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
1
30/1/2010
0.42
9.1
0.47
3.09
0.74
98.29
Sarsamba
2
2/2/2010
0.41
9.2
0.73
1.9
0.11
97.21
Kodli
3
3/2/2010
0.09
9.2
0.24
4.9
0.08
96.29
Sarsamba
4
6/2/2010
0.3
9.3
0.2
3.29
0.2
92.19
Sarsamba
5
6/2/2010
0.56
10.2
0.02
0.8
0.18
99.2
gilda`s
6
10/2/2010
0
9.9
0.38
1.17
0.16
98.19
Kodli
7
10/2/2010
0.06
9.2
0.76
1.83
0.27
97.65
Kodli
8
11/2/2010
0.25
9.8
0.9
5.8
0.5
97.34
Sarsamba
9
15/2/2010
0.03
9.3
0.35
4.34
0.2
99.16
Sarsamba(sinda
gi)
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
Std Parameter
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THANK YOU
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