Earlier talking to reporters, Anjani Sinha, Managing Director and Chief Executive Officer of NSEL, said that the whole concept was a national level institutionalised, electronic, transparent spot exchange ensuring disciplined and organised physical trade of commodities with counter party risk guarantee to the exchange.NSEL had already sold four lakh bales of cotton procured by NAFED from Maharastra and now the operations are spreading to Gujarat and Andhra Pradesh. The seminar-cum-interaction was to spread the knowledge on the availability of a platform for sale and purchase of cotton in a mutually beneficial business proposition, he said.
NAFED at present has more than 30 lakh bales of cotton and NSEL was looking at South India for catering to the cotton needs of the textile mills.Coimbatore was chosen because this region accounted for 50 per cent to 60 per cent of the total textile industry. By bringing transparency on the trading table i.e., platform making the rates known to every seller and every buyer NSEL was bringing in a beneficial trade practice with guarantee for quality of cotton.
Within six months of its operation, NSEL had emerged as leading spot exchange in the country with more than 95 per cent of the market share.The other products dealt by NSEL included silver, guarseed, lemon tur, urad, red arecanut, channa castor seed and gold.Farmers selling their cotton through NAFED and NSEL today got more than four per cent to six per cent price than the physical market.NSEL gets its revenue from the licensing fee, warehouse charges and membership fee.