The Economic Times
New Delhi, 15 July 2013
Kotak Group-promoted ACE Commodity Exchange has said it will introduce the direct delivery concept for cotton from sellers' location for delivery centres located only in Gujarat from the new season. “Under this concept, the seller can deliver cotton from his own warehouse and will not be required to bring the goods to the exchange accredited warehouse,” Ace Commodity CEO Dilip Bhatia said. On the basis of the feedback and suggestion received from the value chain participants of cotton like ginner, miller, exporters, traders and brokers, the exchange has made this important change to the contract specification to make the cotton contract more user friendly, he said. It will be introduced from the new cotton season beginning October, and is expected to boost participation of traders in the value chain, he said. “It will help in increasing the quantum of deliverable commodity on the exchange platform as many ginners were earlier hesitant to participate on trading platform due to the additional six per cent transport cost involved in carrying the goods to the exchange accredited warehouse,” Bhatia said. This concept will reduce the cost of delivery on the exchange platform and will help saving on transportation, warehousing and standard deduction costs, he added. “Our quality control officials will take samples and seal the bales at the ginner warehouse with a specially-designed exchange logo. After the cotton bales pass the Ace quality test it can then be picked up by buyer,” he said. Initially, this will be available only to those traders, who are certified by the exchange. “The certification process involves the past performance of the trader, financial strength and his market integrity,” Bhatia said. If this concept is successful, Ace will extend this concept for other agriculture commodities, including refined soya oil, Bhatia said. The exchange is also planning to introduce additional delivery centres in Maharashtra (Wani and Jalna), Andhra Pradesh (Warangal), Punjab (Bhatinda) and Haryana (Sirsa). “Deliveries from these new centres will be based on request matching, that is the deliveries would be tendered if delivery request for both the sellers and buyers match. However, if the request for delivery at new centres does not match, the buyer then has to take delivery from Gujarat. No cash settlement will be allowed,” said Bhatia.
New Delhi, 15 July 2013
Kotak Group-promoted ACE Commodity Exchange has said it will introduce the direct delivery concept for cotton from sellers' location for delivery centres located only in Gujarat from the new season. “Under this concept, the seller can deliver cotton from his own warehouse and will not be required to bring the goods to the exchange accredited warehouse,” Ace Commodity CEO Dilip Bhatia said. On the basis of the feedback and suggestion received from the value chain participants of cotton like ginner, miller, exporters, traders and brokers, the exchange has made this important change to the contract specification to make the cotton contract more user friendly, he said. It will be introduced from the new cotton season beginning October, and is expected to boost participation of traders in the value chain, he said. “It will help in increasing the quantum of deliverable commodity on the exchange platform as many ginners were earlier hesitant to participate on trading platform due to the additional six per cent transport cost involved in carrying the goods to the exchange accredited warehouse,” Bhatia said. This concept will reduce the cost of delivery on the exchange platform and will help saving on transportation, warehousing and standard deduction costs, he added. “Our quality control officials will take samples and seal the bales at the ginner warehouse with a specially-designed exchange logo. After the cotton bales pass the Ace quality test it can then be picked up by buyer,” he said. Initially, this will be available only to those traders, who are certified by the exchange. “The certification process involves the past performance of the trader, financial strength and his market integrity,” Bhatia said. If this concept is successful, Ace will extend this concept for other agriculture commodities, including refined soya oil, Bhatia said. The exchange is also planning to introduce additional delivery centres in Maharashtra (Wani and Jalna), Andhra Pradesh (Warangal), Punjab (Bhatinda) and Haryana (Sirsa). “Deliveries from these new centres will be based on request matching, that is the deliveries would be tendered if delivery request for both the sellers and buyers match. However, if the request for delivery at new centres does not match, the buyer then has to take delivery from Gujarat. No cash settlement will be allowed,” said Bhatia.
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