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Our Bureau

Kochi, Aug. 24

National Commodity and Derivatives Exchange (NCDEX) will soon introduce non-dematerialised form of commodity trading in the country. The new system will bring down transaction costs for participants in commodity trading, Mr R. Ramaseshan, MD and CEO, NCDEX Ltd, said.

Addressing a press conference, he said the system of commodity trading in NCDEX was in de-materialised format, which will incur a cost of Rs 600 for a deliverable contract. Due to this additional cost, the participation is low as the margins of most of the commodities are below the cost.

NCDEX is also developing a warehouse management system as part of this and it will be introduced in two months. The software is ready and trial was on, he said.

The exchange also had plans to launch spot exchanges in various other commodities as the spot exchange for steel contract is running successfully, Mr Ramaseshan said, adding that Kerala offered a lot of opportunity for spot market as there were no restrictions on marketing agricultural produce.

It had also proposed to start power trading from October and had received in principal approval from Central Electricity Regulatory Commission. The exchange had floated a new company, Power Exchange of India Ltd, in this regard, he said.

NCDEX, which commenced operations in 2003, facilitates trading in over 56 commodities including 42 agricultural, 6 metals, 1 environment, 2 precious metals and 2 energy products. Trading is conducted via around 20,000 terminals across 700 centres and deliveries are enabled in around 800 centres. The exchange witnesses deliveries of around 40,000 tonnes every month and the average volume traded on the exchange is over Rs 3,000 crore per day, he said.

The exchange is also planning to incorporate best practices in the world for commodities trade. It would encourage investors and corporates to use the exchange platform for investing and hedging.

More Stories on : Commodity Exchanges

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