Price Discovery MechanismKnowledge Management

Extension Services

Topics

• Commodity & Spot Exchanges

• Agro Advisory services including

weather stations

• Use of Information technology

Issues

• Has the price discovery problem been shared with thespread of the cell phone?

• What is the scope for weather based agro advisoryservices and insurance products for the benefit of farmers?

• What are possible PPP structures to make this happen on alarge scale?

• What are the risk management protocols and regulatorystructures necessary to prevent the NSEL type issues?

• What are the key uncertainties a farmer faces & are therecommercially feasible alternatives to address theseproblems from a farmers perspectives?

Panelists

Samir Shah, MD - NCDEX (Lead Presenter)

Anuj Kumbhat, CEO & Director - WRL

Anil Mishra, MD & CEO - NMCE

Rajnikant Patel, Ex MD & CEO - ICX & BSE

Natesh BV, Director - Nokia Life Tools

• Volumetric Growth ofFutures Market has precededCash/Spot Market Growth

• Infrastructural (Storage) bottlenecks and regulatory clarity

• Essential Commodities Act

• State APMC Act

• Stock Control Orders

• VAT, Octroi, Cess etc

Uniqueness of Indian Commodity Market

C is more important than EFGH

Information holds keys to price discovery

While most studies find

evidence of information flows

between the spot and futures

markets, the degree of

information flows and their

direction vary significantly.

The variation is mostly based

on the type of commodity

studied, the market

infrastructure and the

operation of arbitrageurs in

the futures market.

“Let them eat cake” Queen Marie Antoinette

NCML Automatic Weather Station Network (2043 AWS)

407

36

28

43

43

139

33

29

318

73

447

13

52

13

Changing Market Structures

Information

revolutionBusiness houses

are no longer able

to make profits on

simple trade

transactions.

Concentration/

consolidation:

medium-sized

players are

disappearing

Almost all B-

houses move

into new areas

(e.g. futures trade,

physical broking)

Penetration

into trading at

domestic level

Penetration

into value-added

Activities

Entry of

new actors

Asset Creation

Backward

Integration into

Production

National Collateral Management Services Ltd.Gayatri Towers954, Appasaheb Marathe Marg,Prabhadevi,Mumbai 400025.

Tel: +91 22 4041 9191Fax: +91 22 4041 9193

website: www.ncml.com

Thank You