National Commodity & Derivatives Exchange (NCDEX), a leading agricultural commodity exchange in the country, is integrating electronic spot markets across various locations in the country in a bid to develop a more transparent and vibrant futures market in the country, a top official said on Saturday.

“We are in the process of integrating spot markets electronically across locations for different agro-commodities that can be traded across our futures offerings. These spot markets have a compulsory delivery contracts. We have so far set up electronic spot trading for chana (Indore), guar (Gulbarga), rapeseed and mustard (Rajasthan),” said Vijay Kumar, chief business officer of NCDEX.

“Plans are afoot to integrate spot markets in Andhra Pradesh for wheat through our subsidiary NCDEX Spot Exchange. We have got approvals for operating electronic platforms in some other states too. Over 30 commodities are traded on the NCDEX platform and the spot exchange plans to integrate more electronic spot markets in future. The ideal way will be to have spot market integration for all traded commodities. NCDEX Spot has plans to create a platform which would sell all commodities such as agricultural, metal, energy, freight and perishables,” Kumar of NCDEX said. A better spot market (outside the existing mandi set-up) will help all stakeholders interested in the futures market, he added.

Promoter shareholders of NCDEX are ICICI Bank, LIC, National Bank for Agriculture and Rural Development (Nabard) and NSE.

Meanwhile, the Forward Markets Commission (FMC) and NCDEX jointly conducted a conference that highlighted that demand-supply was the single most important factor that influences prices. As per an analysis done by NCDEX, the inflation trends (year-on-year basis) for traded and non-traded goods in January 2010 over January 2009 show that the prices of goods not traded in the futures market have risen sharply in comparison with those that are traded.

“Even a high-level committee under Prof Abhijit Sen did not see any relation between futures trading and inflation. In several products, futures prices have given right indications of the state of the crop,” said MK Anandakumar, chief corporate services, NCDEX.

Commodities such as moong (68.77 per cent), masoor (22.69 per cent), bajra (31.53 per cent), eggs and meat (30.69 per cent) were examples cited. The items in which futures trading were banned such as tur (77.12 percent), urad (60.29 per cent) and sugar (58.96 per cent) also showed similar trends.