MSTC plans for forward trading in horticulture products

The government owned MSTC Ltd plans to launch forward trading in horticulture products sector to support its recently launched nationwide electronic portal – eRaKAM. Union Food Minister Ram Vilas Paswan said that around 2 million tonnes of pulses procured by the Food Corporation of India (FCI), would be auctioned on eRaKAM to begin with. Online trading platform mainly deals in food grains, vegetables, fruits, spices and all agriculture related commodities and connected farmers directly with consumers. It is all set to launch forward trading in pineapple and mango among a number of other such commodities to make the platform successful.

 

MSTC does not feel the need to get regulatory approval for launching forward trading as it is proposing it in the horticulture commodities speciallly perishable commodities which are not traded in futures segment.  Chairman and Managing Director of MSTC, B B Singh said “There is a normal practice in remote Indian villages to sell entire mango fruits for the season in an orchard at the time of flowering. This practice is prevalent since ages without any regulatory approval. If we are allowing mango / pineapple farmers to know their realisation at the time of flowering, farmers would be encouraged to take care of their fruits better. It is better, if farmers find buyers well ahead of harvesting of their products to reduce spoilage, as horticulture is a product with short shelf life. For cereals, however, forward contracts may not be needed due to their long shelf life. Meanwhile, MSTC is just a platform and not trading in any commodity.”

 

MSTC is engaged in the e-auctions of cereals, sandalwood, land parcels, teak wood and other such products on behalf of the state and central governments through its own e-portal. The newly launched electronic commodity trading platform eRaKAM is dedicated to farmers in the Northeast who can sell their commodities to the highest bidders across the country and fetch higher price. Singh said, “The target customers for eRaKAM portal are farmers, farm producer organisations (FPO), federation of farmer cooperatives, institutional agencies like Nafed, FCI, Apeda, mill owners etc on one hand and the traders, institutional buyers like Mother Dairy, Spencer, Metro.”

 

Existing private player in business NCDEX eMarkets Ltd (NeML) has gained traction from traders especially in Karnataka where its parent National Commodity & Derivates Ltd (NCDEX) has modernised spot mandis. Managing Director and Chief Executive Officer of NeML, Rajesh Sinha said “NeML markets have facilitated trades worth more than Rs 42,000 crore in FY 2016-17, a growth of more than 30 per cent as compared to last year. NeML has helped farmers’ income grow by over 35 per cent. NeML’s unique product – e-pledge – aimed to provide credit to small holder farmers (SHF), has facilitated credit worth more than Rs 1000 crore against the commodity deposited in NeML accredited warehouses and approved by the banks. We remain focused to help farmers to enhance their income leveraging our e-trading platforms. We would continue to focus on primary markets.”

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