Calcutta, July 28: The National Commodity & Derivatives Exchange Ltd (NCDEX) will start spot market trading in agricultural commodities through a subsidiary, NCDEX Spot Exchange Ltd, in Bengal and Rajasthan from October.

NCDEX managing director and chief executive, P.H. Ravikumar, said this today on the sidelines of a seminar organised here by the Bengal Chamber of Commerce and Industry. The subsidiary is also talking to Madhya Pradesh, Maharashtra, Haryana, Gujarat and Andhra Pradesh governments to start spot market operations in those states, he added.

“Since spot market activities do not come under the Forward Markets Commission, we had to form a subsidiary to carry out the same. The subsidiary will now have to take permission from individual state governments, as agriculture is a state subject. We have already got approvals from Bengal and Rajasthan governments and will soon start operations in these two states,” he said.

The National Collateral Management Services Ltd, a company promoted by NCDEX, Nabard, Sidbi and a few banks, will act as the provider of logistics and warehousing. Farmers can also take a loan from a bank against the receipt of such warehousing.

Recently, NCDEX procured 60,000 tonnes of rice from 45,000 farmers in Madhya Pradesh and Orissa for Food Corporation of India at the minimum support price (MSP). The project was done on a pilot basis and FCI has asked NCDEX to procure rice from Bihar and Uttar Pradesh.