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National Commodity and Derivatives Exchange Limited (NCDEX) entered into a MOU (Memorandum of Understanding) with Food Corporation of India (FCI) here today to establish a working relationship in the areas of procurement, quality testing, grading and open market operations that adds value to the businesses of both the entities.
The MOU was signed in the presence of Shri Sharad Pawar, Minister of Agriculture, Consumer Affairs, Food and Public Distribution. Speaking on the occasion, the Minister said that signing of this MOU was a significant step in the direction of uniform price discovery of agri commodities at the national level. It also signified a step forward towards creation of a common national market and would encourage the electronic linking of agricultural markets across the nation. He expected the agreement to further strengthen the logistics in the areas of procurement, storage and inspection of foodgrains in the country by bench marking the services of FCI to market related efficiencies, which would result in lesser burden on the exchequer.
Under the terms of the MOU procurement and sale of foodgrains will be carried out from cooperative societies all over India with the help of NCDEX. NCDEX will also act as facilitator for carrying out procurement operations through its associated company National Collateral Management Services Ltd. (NCMSL). FCI would also decide to make use of NCDEX’s trading platform for procurement and sale of foodgrains and the two would work together and devise modalities for designing such contracts. FCI would work with NCDEX to promote online trading in foodgrains (both spot and futures) on mutually agreed terms. FCI would also share their warehousing space with NCDEX. Further, FCI has agreed to make available its testing laboratories to NCDEX and NCMSL while it expects to use the services of NCMSL for third party audit of stocks and operational facilities of FCI.
FCI is in the business of purchase, procurement, storage, distribution and sale of foodgrains across the country. NCDEX is a premier national level multi-commodity online commodity exchange promoted by national level institutions. NCDEX provides for futures trading in 34 commodities through over 6000 terminals in over 440 centres in the country. NCDEX has brought about several innovations in futures trading including polling of spot prices and holding of commodity balances in electronic form.
SBK:CP:mou6.4
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