Shri Shankarlal Guru -Director - NMCE - Briefing the media about the achievements of NMCE.

Shri Kailash Gupta - M.D. - NMCE ( on the right) attending one of the invitees at the conference.

Shri R.N.Meena - Regional Manager - CWC & Shri Rajpal Gaba - Branch Manager, NAFED-Ahmedabad

National Multi-Commodity Exchange of India Limited (NMCE), India’s first demutualized electronic exchange completed one year of its successful operations today.

Addressing a press conference in Ahmedabad, Mr. Kailash Gupta, Managing Director, NMCE, said “We have yet another good reason to celebrate our first anniversary, Last week we received ISO 9001:2000 certification from British Standard Institute (BSI), an independent internationally recognized agency. Adherence and audit of quality policy and quality objective of a Company, as you may be aware, are the determining factors for consideration of ISO certification, which is issued only after the certifying agency conducts a pre and post audit of the company’s management practices. We are proud of the fact that NMCE met all the requisite high quality standards, and has become the first and only Commodity Exchange in the country with ISO certification.  That a well-respected agency like BSI has given ISO recognition to NMCE, further endorses the professional approach as well as quality work of our Exchange and of our people who have contributed to the many achievements of NMCE in the last one year.” 

Starting its operations in a record time of just 11 months after it was incorporated as a Public Limited Company, NMCE commenced futures trading in 24 commodities on 26th November, 2002 on a national scale and since then, on its path of growth, increased the number to 49, out of which 41 are agro-related commodities.

NMCE is promoted by commodity-relevant public sector undertakings such as Central Warehousing Corporation (CWC), National Agricultural Cooperative Marketing Federation of India (NAFED), National Institute of Agricultural Marketing (NIAM), Gujarat Agro-Industries Corporation Ltd. (GAICL), Gujarat State Agricultural Marketing Board (GSAMB), and a leading export-import house - Neptune Overseas Ltd.

Mr. Gupta said “These organizations together provide a leading edge to NMCE in terms of availability of a fund of vast knowledge, capabilities, capacities and experience, in their respective fields so critical to the complex operations involved in commodity trading. NMCE derives great strength from its lead promoter CWC, the largest warehousing company in the world, which on any given day holds goods valued at Rs. 4000 Crores,  Access to CWC’s own vast network of 493 warehouses and additional availability of the State Warehouses where CWC has 50% partnership, is again a major advantage to NMCE which will continue to be the only Commodity Exchange with a countrywide and vast warehousing infrastructure.”

Reviewing the performance of NMCE in the last one year, Mr. Gupta said “ Considering that it was for the first time that futures trading was carried out on online, our Exchange received a good response from the trading community. On an average, our daily turnover is around Rs. 150 crores. We exceeded the annual target of Rs. 20,000 crores, within eight months of our operations and our cumulative turnover till date is Rs. 39,981.36 crores. Some of the commodities like Rubber, Pepper, Rapeseed, Soyabean Oil, and Gold, have witnessed excellent volumes. We have received approval from Forward Markets Commission to start futures trading in Wheat & Rice, which will be launched next month.”   

Futures Trading in Rubber, which took off on March 15, 2003 for the first time in India, saw the highest volume of 4876 lots valued at Rs. 29.61 crores in a single day with a cumulative turnover of Rs. 980.66 crores till date. Similarly Pepper has seen the highest volume of 538 lots valued at Rs. 3.49 crores  in a single day with a cumulative turnover of Rs. 202.2 crores till date. Gold, which was launched on October 3rd this year, touched a turnover of Rs. 18 crores on a single day on November 11.  The cumulative turnover in Gold since its launch,  has reached Rs. 92.39 crores.

Mr. Gupta further said “ We are happy that we are fulfilling the obligations that go with a pioneering activity. We have in addition to achieving many firsts to our credit, set standards in terms of market practices, products and technology, contract design, membership criteria, which have now become industry benchmarks.”

The 49 commodities presently traded at NMCE include Castor Seed/Oil/Oilcake, Rape-Mustard Seed/Oil/Oilcake, Groundnut/Oil/Oilcake, Sunflower/Oil/Oilcake, Cotton Seed/Oil/Oilcake, Sesame Seed/Oil/Oilcake, Copra, Coconut Oil/Oilcake, Safflower/Oil/Oilcake, Sugar, Crude Palm Oil, Gur, RBD Palmolein, Soyabean/Oil/Oilcake, Ricebran Oil, Vanaspati, Gram, Linseed/Oil/Oilcake, Pepper, Guarseed, Sacking, Aluminium, Nickel, Copper, Zinc, Lead, Tin, Rubber, Gold & Silver.

Ahmedabad
November 26, 2003

NATIONAL MULTI-COMMODITY EXCHANGE OF INDIA LIMITED
- A Pioneer in India’s Multi-Commodity Futures Trading

• First  to get the “National” Status.

• First to be promoted by Commodity-relevant Institutions

• First to be fully operational  

• First Demutualised Exchange i.e. ownership, management and trading are with three different sets of people

• First to introduce Online Trading and Settlement software using state-of-the-art technology capable of national reach

• First to commence futures trading in 49 commodities including metals.

• First to introduce futures trading in Rubber.

• First to establish commodity trading terminal in the state of Jammu & Kashmir. The Srinagar terminal has done a good business of around 2 Crores within 2 months.

• First to introduce Warehouse Receipts system for deliveries in graded and standardized commodities – ensuring delivery in Demat form

• First to establish Trade Guarantee Fund – Guaranteed settlement by assuming counter-party risks

• First with V-SAT based connectivity through out the country

• First to provide Real time trade and price information dissemination to participants

• First Exchange to use LEMDA based Margining at 99.9% VaR (Value at Risk) system for the initial margin

• First to offer membership fees at the lowest among the National Exchanges

• First to introduce the concept of high degree of transparency in commodity trading.

• First to set the standards in terms of market practices, products and technology, contract design, membership criteria, which have become industry benchmarks

• First to get permission after 41 years to start futures trading in bullion

• First to receive ISO certification

National Multi-Commodity Exchange of India (NMCE) was formed with a concept of equity participation from commodity-relevant prominent players in Public Sector Undertakings such as Central Warehousing Corporation (CWC), National Agricultural Cooperative Marketing Federation of India Limited (NAFED), National Institute of Agricultural Marketing (NIAM), Gujarat Agro Industries Corporation Ltd. (GAIC), Gujarat State Agricultural Marketing Board (GSAMB) and Banks & Financial Institutions and Neptune Overseas Ltd. (NOL), a leading export-import house.

These organizations together provide a leading edge to NMCE in terms of availability of a fund of vast knowledge, capabilities, capacities and experience, in their respective fields so critical to the complex operations involved in commodity trading. Coupled with the latest technology, a high degree of transparency and professional management practices, NMCE has already established itself as a successful National Commodity Exchange.

NMCE commenced future trading in 24 commodities and within a period of six months, added another 23 commodities and from October 2003, it started trading in Gold & Silver. The commodities include oilseeds, oils, metals and plantation crops.  Currently 214 Traders participate thru NMCE’s network covering 48 locations, and plans are on the anvil to cover most of the cities in the country in a short span of time.

The barrier-less financial implications for NMCE membership are: Rs. 2,00,000 interest free security deposit for V-SAT based satellite communication with no lock in period, Rs. 10,000 as annual subscription charges and Rs. 5,000 per month as minimum transaction charges. NMCE does not ask for admission fees or collateral security deposit for membership. A significant advantage that is available to the participants at NMCE is the low transaction cost in comparison to the physical markets. This coupled with its efficient and matured Warehouse Receipt System that eliminates the hassles and expenses that go with physical handling, has further brought down the transaction cost to a bare minimum.

The unique strength of NMCE is Settlement by Delivery Backed System, which is imperative in the commodity trading business.  Thanks to its lead promoter, Central Warehousing Corporation and NAFED, NMCE’s delivery is backed by sound and reliable Warehouse Receipt System, which has led to efficient clearing and settlement.

As a pioneer in the National Multi Commodity Exchange in the country, NMCE has been playing a catalytic role in reforming the commodity market in terms of micro structures, market, practices and trading volumes. The Exchange has adopted the purest form of demutualised Exchange where the ownership, management and trading are with three different sets of people. NMCE has shifted trading platform from the trading hall (open outcry) in the premises of an Exchange, to computer terminals at the premises of the brokers. The dematerialization of electronic transfer of warehoused commodity stocks, professionalization of commodity trading members and establishment of a clearing house to assume the counterparty risk for settlement backed by a reliable delivery system has nearly eliminated settlement risks.

Central Warehousing Corporation (CWC) is one of the largest warehousing agencies in the world and is an ISO 9002 and 14001 certified organization, and provides access to NMCE to its network of 493 warehouses with storage capacity of 9.3 million metric tonnes for more than 400 types of commodities throughout the agricultural belts and industrial cities of the country. CWC also operates about 25 CFSs cum Inland Clearance Depots in addition to 3 Air Cargo Complexes. NMCE therefore will continue to be the only Commodity Exchange with a priority for space in countrywide and vast warehousing infrastructure.   

The 49 Commodities presently traded at NMCE include Castor Seed/Oil/Oilcake, Rape-Mustard Seed/Oil/Oilcake, Groundnut/Oil/Oilcake, Sunflower/Oil/Oilcake, Cotton Seed/Oil/Oilcake, Sesame Seed/Oil/Oilcake, Copra, Coconut Oil/Oilcake, Safflower/Oil/Oilcake, Sugar, Crude Palm Oil, Gur, RBD Palmolein, Soyabean/Oil/Oilcake, Ricebran Oil, Vanaspati, Gram, Linseed/Oil/Oilcake, Pepper, Guarseed, Sacking, Aluminium, Nickel, Copper, Zinc, Lead, Tin, Rubber, Gold & Silver. 

November 2003