connecting farmers to markets fpo update · chhattisgarh - 2 andhra pradesh - 1 tamil nadu - 0...

Connecting Farmers to Markets 1 28 August 2016

Connecting Farmers to Markets

FPO update – November 2017

Connecting Farmers to Markets 1 07 December 2017

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Snapshot

0 10000 20000 30000 40000 50000 60000 70000

Month

May-16

Jul-16

Sep-16

Nov-16

Jan-17

Mar-17

May-17

Jul-17

Sep-17

Nov-17

03,500

8,000 15,000

16,000 16,000

16,000 18,00018,500

19,50025,000

26,40030,500

34,50039,100

43,32743,327

44,50346,803

47,103

61,440

No. of farmers who traded on NCDEX

9.4

6.67.7

9.48.3

9.4

6.6

9.4 9.0

0.01.02.03.04.05.06.07.08.09.0

10.0

FPO Realisations through Futures (% increase over prevailing spot price)

0

5000

10000

15000

20000

25000

Ap

r-1

6

May-1

6

Ju

n-1

6

Ju

l-16

Au

g-1

6

Se

p-1

6

Oct-

16

Nov-1

6

Dec-1

6

Ja

n-1

7

Feb

-17

Mar-

17

Ap

r-1

7

May-1

7

Ju

n-1

7

Ju

l-17

Au

g-1

7

Se

p-1

7

Oct-

17

Nov-1

7

60 1000

50506068

6728

85588958

10118

10568

10778

1092811498

1190812568

13448

13828

17478

2102821138

21238

Traded Quantity (MT)

55

Farmer Producer Organisations (FPOs) who

traded on the NCDEX platform

61,440

Farmers represented by trading FPOs

14

States covered

14

Commodities traded

118

FPOs who have opened accounts with NCDEX

138

FPOs in the process of

opening trading accounts with NCDEX

Commodities traded on the Exchange platform since April 2016

April-November 2017

Maize

12,990 MT

MTMT

Soybean

7,670 MT

RM Seed

460 MT

Castor

40 MT

Guar Seed

40 MT

Wheat

100 MT

Cocud

40 MT

Barley

70 MT

Soy Meal

20 MT

Kapas

8 MT

Turmeric

40 MT

RM Cake

20 MT

Jeera

15 MT

Pepper

14 MT


FPO engagement – NCDEX Footprint

Rajasthan - 7

Maharashtra - 66

Bihar - 9

Madhya Pradesh - 15

Telangana - 4

Karnataka - 2

Haryana - 0

Uttar Pradesh - 2

Chhattisgarh - 2

Andhra Pradesh - 1

Tamil Nadu - 0

Gujarat - 8

NCDEX is actively engaged in the training of farmers, handholding the Farmer Producer Organisations

(FPOs) and connecting them with the Exchange platform in several States across the country. We have

successfully on boarded 118 FPOs so far and are growing strong with each passing month.

The number of FPOs in each State (above) represent those FPOs, who have either traded or opened

a trading account with NCDEX. States that do not have any value assigned to them are the ones where

NCDEX is actively engaged in training of farmers and the FPOs, however no accounts have yet been

opened.

Punjab - 1

Kerala -1


State in focus

Background

Karnataka – Though the concept of Unified Market Platform (UMP)

as proposed by our Finance Minister, Mr. Arun Jaitley, in the Union

Budget of 2015-16 may take some time to evolve, the state of

Karnataka is already leading the pack in this regard, with online

integration of its APMCs. Also popularly known as the ‘Karnataka

model’, the UMP concept is getting power under its wing, as ably

demonstrated by Karnataka. Agricultural landscape in Karnataka is a

combination of areas that are drought prone as well as highly fertile,

well-diversified terrain. Areas such as horticulture, floriculture, food

processing and other allied agricultural activities have contributed

significantly to the growth of the state’s agri sector, in addition to its

famed IT sector. For many rural residents of Karnataka, agriculture is

the major occupation. A total of 123,100 sq.km of land is cultivated,

constituting 25.3% of the total geographical area of the state. Agriculture in Karnataka is heavily dependent on the southwest

monsoons since the extent of arid land in the state is second only to

Rajasthan. The state has three agricultural seasons: Kharif (April to

September), Rabi (October to December) and Summer (January to

March). The main crops grown here are Rice, Ragi, Jowar, Maize, and

Pulses (Tur and Gram), besides Oilseeds and a number of cash crops.

Cashews, Coconut, Arecanut, Cardamom, Chillies, Cotton,

Sugarcane and Tobacco are amongst other crops produced in the

state. In order to fuel growth of innovative ideas in the agritech sector,

Karnataka is the country’s only state, wherein its state agricultural

department has set aside Rs.10 crore fund (to be administered by the

information technology and biotechnology (ITBT) departments), for

fostering agri-innovation in the state.

NCDEX Impact

FPOs of the region understood the concept of hedging and

soon they will start participating on the Exchange platform.

Organisations like ISAP and Horticulture Board have shown

interest to on board their FPOs on the Exchange platform.

FPOs from the districts surrounding delivery centres have

shown interest in participating on the electronic trading

platform.

FPOs are organising exposure visits to understand cleaning,

grading and processing of commodities.

Farmers are willing to come out of the traditional trading

system and have shown interest in using Futures platform to

sell their crops.

FPOs have subscribed to daily Futures prices and these

prices are communicated to all member farmers.

Highlights

NCDEX listed commodities – Sugar, Pepper

and Maize

NCDEX Delivery centres – Belgaum, Hassan,

Shimoga and Davengere

Number of FPOs registered on Exchange

platform: 2

Number of FPOs participated on Exchange

Platform: 0

Number of FPOs in the account opening

process: 4

Number of farmers associated with the trading

FPOs: around 2,000

Financial partners: Samunnati Finance and

NABKISAN

Partnering Member: Karvy Comtrade and RBG

Partner organisations for capacity building in the state: ISAP, Horticulture Department and NABARD.

Karnataka


Events & Training

Modasa, Gujarat

Training program for Reliance

Foundation promoted Farmer

Producer Organizations (FPOs) in

Gujarat (Modasa) on Futures

trading and its benefits for farmers.

Mumbai, Maharashtra

Training program for Mann Deshi

Foundation officials at Mumbai,

Maharashtra on Futures trading

and its benefits to farmers.

FPO Training

Patna, Bihar

Training program for NABARD

supported POPIs at Patna, Bihar on

Futures trading and its benefits for

farmers.

NABARD and SEBI

Conference organized by

NABARD and SEBI on connecting

farmers to electronic markets and

how to double farmer incomes.

Wayanad, Kerala

Training program for NABARD

supported FPOs at Wayanad,

Kerala on Futures trading and its

benefits for farmers.

NCDEX participation in the National Seminar on "Linking FPOs with Commodity Exchanges - Challenges &

Opportunities”

The seminar focused on evaluating preparedness of the Farmer Producer Organisations (FPOs) in terms of enabling

trading on the Exchange platform, understand the related constraints and policy reforms. The seminar also explored

the role of NCDEX e Markets Ltd. (NeML) in facilitating improved market access to FPOs, and also helped impart

guidance to leverage agri-Futures tool for improved price realisations.


Kheti Ke Sikander

Turning the tide of Pepper market with quality upgrade

Malabar has always been known for its spices, especially for its superb quality

Pepper for centuries. However, that’s a thing of the past. It has not only lost its

quality uniqueness, but also its quantity superiority. Currently, there are 26 pepper

producing countries in the world. Vietnam leads with volume, whereas the Sri

Lankan pepper enjoys the best quality tag. The immediate casualty of this changed

trade dynamics are the farmers of Kerala. Farmers of Idukki, the only region in

Kerala that produces pepper to match Sri Lankan quality, aren’t fetching good

prices, as inferior quality pepper from abroad has lowered the benchmark prices

in Kochi mandi, that is used as the yardstick for their produce.

Amidst such a situation, a farmers’ group called Devikulam Cooperative Society,

has come forward as a saviour for the local farmers. The society procures produce

from the farm gate and sells them at Kochi mandi, thereby saving the

transportation cost for the farmers. To ensure best possible price for the farmers,

the society keeps a track of the prices in Kochi mandi and sells the produce when

the prices reach at an appropriate level. But the overall market condition has

become a source of pain. “We give prices on the basis of Kochi mandi. But now

the problem is that the mandi is populated with low quality imported pepper and

that has lowered the average price level. Due to this situation, our farmers are not

getting good prices even for their premium quality produce”, said Jijo Thomas, an

official from Devikulam Cooperative Society.

Under such circumstances, the society is continuously looking for new and

innovative ways to fetch better prices for its member farmers. Doing collateral

management through bank financing saves farmers from distress sell. But now,

after the relaunch of pepper contract on agri commodity exchange platform -

NCDEX, officials of Devikulam have found a new ray of hope for direct marketing

of the farmers’ produce. “Currently, we are selling the procured pepper at the

mandi level only, as the stringent quality standards set by the Exchange are difficult

for farmers to meet. However, we’re in the process of constructing a grading and

processing plant soon to address this area. As soon as it gets ready, we will

commence working on the NCDEX platform with admissible quality standards”,

says Mr. Sunny MJ, Secretary, Devikulam Cooperative Society.

In fact, the Devikulam team have already begun taking advantage of the NCDEX

Pepper Futures contract to hedge their stocks from any price fall. Just last month

the society managed to successfully save around Rs. 5 lakh by trading on the

Exchange platform. “We had a stock of around 20 MT and prices began to fall due

to excessive import quantity. There weren’t any buyers around. Then, we used the

NCDEX platform to hedge our quantity in 2 lots and later sold them in Kochi mandi.

This way we were able to reduce our losses to Rs. 5 lakh in lieu of Rs.10 lakh

which we could have incurred had we not used the hedging tool” - says Mr. Sunny

MJ. Industry insiders say farmers have no choice other than to sell their crop to

processors as they don’t have the right resources to upgrade their produce up to

the tradable quality. But with the newly launched pepper contract, FPOs such as

Devikulam Cooperative Society are all set to change the rules of this game. The

FPO has already started training their members in the areas of quality upgrades,

that will provide them with a direct marketing tool to fetch best prices for their

member farmers

Devikulam Cooperative Society


NCDEX Indices

Dhaanya is an agricultural commodities index computed by NCDEX. It aims to provide a reliable benchmark for the traded Agri-commodities in India. It is based on simple and transparent methodology.

The components of Dhaanya are selected from diverse sub sectors of the Indian agri industry and accounts for nearly 70% of the trading on the NCDEX platform. Commodity selection is based on both endogenous (liquidity) and exogenous (importance in Indian/ Global commodities market) criteria.

The NCDEX Agri Futures index would be constituted by the top ten liquid commodities traded on the NCDEX platform. It is a value weighted index, weights are assigned to each component based on national production and the traded value. Equal importance is given to both the parameters to calculate the final weights of the index components. The index is computed in real-time, using price of the near month traded Futures contracts.

Dhaanya is a rolling index i.e. periodically Futures contracts held in the index are rolled over onto the next near month contracts as current month contracts approach expiration. Dhaanya components and their weights are rebalanced every three months based on the production values and liquidity situation prevailing in the market place.

Currently, Dhaanya comprises of Castor seed, Cottonseed Oil Cake, Dhaniya, Guarseed, Jeera, RMseed, Chana, Soybean, Turmeric and Wheat.

At the beginning of April 2017 Dhaanya index value was around 3,163. Since then the value has decreased by 10.4%, reaching a minimum of 2,834. Bearish trend in all commodities since April 2017 is the cause of fall in Dhaanya.

Spices Index components comprise of spices – an integral part of the Dhaanya Index. It is an equal weighted index; meaning that each constituent of the index carries an equal weightage in the index value calculation.

Currently, the spices index comprises of Dhaniya, Jeera and Turmeric.

2700

2800

2900

3000

3100

3200

3300

3400

Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17

Dhaanya

1400

1500

1600

1700

1800

1900

2000

2100

2200

Spices


Partner Ecosystem

Members

Financing

Agencies

Promoting

Agencies

MACP

Supporting

Agencies

Consulting

/ Training

Agencies

Grant

Thorton


NCDEX e Markets Limited (NeML)

The FFresh team of NCDEX e Markets Ltd. (NeML) continues with its efforts in connecting farmers from growing areas

to the consumption markets. Currently, the team is engaged in connecting farmers with the FFresh markets for the

following commodities:

Pomegranate, from the growing areas around Pune and Nasik in Maharashtra.

Kinnow, from the growing areas of Sirganganagar (Rajasthan) and Abohar (Punjab).

Strawberry, from the hills of Mahabaleshwar in Maharashtra.

POMEGRANATE

The NeML team visited the production centres of Phaltan, Girvi, Sangvi, Indapur and Samngamner. The team introduced

FFresh concept and the platform to a gathering of farmers and registered them on the platform. Couple of FPOs and

their representatives, namely Mr. Nilesh Kadam from Gopal Krishna Farmer Producer Company (Phaltan), Sopan Unde

(Phaltan) and Next On Foods Pvt. Ltd (Pune) decided to come on board.

Below mentioned are the details of farmers who sold their produce through FFresh platform:

Member Name

Location No of

Trades

Net Weight Kg. Value Destination Markets

Sopan Unde & Nilesh Kadam

Phaltan 5 10,359 5,35,481/- Siliguri, Muzaffarpur

Next On Foods Pvt Ltd Pune

7 29,988 15,38,087/- Siliguri, Chennai,

Muzffarpur

The NeML team identified the consumption markets of Siliguri and Muzaffarpur for the produce. These are primarily the

markets for small sized fruits, while Chennai demands larger and high quality pomegranate. As the size of the fruit was

average we accordingly suggested them the relevant markets.

KINNOW

For the past couple of years, the Kinnow growers from Rajasthan and Punjab are engaged with NeML for their sales activities. This year NeML deployed one of its dedicated resource at the start of the season at Sriganganagar. This was done to ensure that we reach out to as many growers as possible and help them establish market linkages. The season has begun and we are looking forward to a very prosperous one for the growers. So far, NeML has worked with three growers namely Mr. Rajesh Jhakhar, Mr. Parth Dawra and Mr. Gurprit Singh

Thind. Mr. Gurprit and Mr. Parth have collectively dispatched three vehicles, till date.

Member Name

Location Net Weight

Kg. Value (Rs) Location

Gurprit Singh & Parth Dawra Sriganganagar 40,670 12,60,770/- Bangalore, Siliguri, Chennai


STRAWBERRY

The Strawberry season has started around 15th November and will last until the end of February. The early variety of

winter strawberry has started flowing in and the first picking was undertaken on 15th November. Team NeML began its

engagement with the farmers since September, with assisting farmers in planning for the season. NeML has opened a

collection centre at village Bhilare, so that the local farmers could deposit their produce in the village itself. The logistics

for the onward dispatches are also managed from this village centre, thereby reducing the multiple transit exchanges.

In the past fortnight, NeML has successfully helped growers with the following trades:

Members Name Location Qty in punnets Trade Value

Mr. Deepak Yadav Mahabaleshwar 1,008 50,400

Mr. Dinesh Bhilare Mahabaleshwar 1,030 51,500

Mr. Santosh More Mahabaleshwar 3,563 1,78,150

Mr. Suresh Pawar Mahabaleshwar 4,719 2,35,950

Mr.Sunil Bhilare Mahabaleshwar 996 49,800

NeML is dispatching the produce to the following consumption markets:

Location No. of Punnett Value

Chennai 3,808 2,36,676

Bangalore 3,920 2,20,080

Bhubaneswar 280 15,400

Mumbai 2,748 1,36,536

Kolkata 112 6,160

Pune 224 12,320

Disclaimer

---------------------------------------------------------------------------------------------------------------------------------------------- This Report is for general information of the recipients. The views and opinions expressed in this document may or may not match the views of the reader. It does not

constitute a personal recommendation or take into account the particular investment objectives, financial situations, or other needs of the reader. This document is not

intended to be and must not be taken as the basis for any investment decision. It should be noted that the information contained herein is from publicly available data or

other sources believed to be reliable. We are not soliciting any action based upon this material. Neither NCDEX, nor any person connected with it, accepts any liability

arising from the use of this document.

connecting farmers to markets fpo update · chhattisgarh - 2 andhra pradesh - 1 tamil nadu - 0...

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