The growth of the economic sector in a nation depends upon a number of factors including strong infrastructure, investor friendly policies, easy procedural schemes, etc. In the past few years, it has been seen a rapid development of the commercial sector of India. Focussing at increasing the domestic production levels benefiting the Indian economy, offering employment opportunities to the working cadre and liberalization of the investment policies. The Government has been devising schemes for benefiting the corporates to establish their businesses in the country.
Agriculture forms an essential pillar of Indian economic structure in India. The goods exported under this head are rice, fresh fruits and vegetables, seeds, dairy products, pulses, seeds, nuts, cereals, poultry, processed items, etc. Agri-imports constitute only a small proportion of the country’s total imports including food grains, exotic fruits, specific nuts, edible oils, milk products, etc.
The commodity trading in agricultural goods are aimed at stabilising the overall prices of commodities and ensuring fair prices to the producers, avoiding instabilities, establishing link between producers and consumers, appropriate pricing, etc.
The market regulator, The Securities Exchange Board of India (hereinafter referred to as “SEBI”) widened the scope of the market by allowing new participants to trade on the exchange platform by allowing Alternative Investment Funds to take trading position in commodity markets.
Majority of the agricultural commodities traded on exchange platform require assaying which involves determination of the quantity and content of the products intended for business transactions. The number and size of the samples are determined by the nature of commodity and the requirements of tests to be done in order to meet the exchange specifications.
In order to bring in uniformity in the procedure adopted by the exchanges, SEBI directed all the Exchanges and Clearing Corporations to ascertain that adequate samples of goods are collected and retained from the goods deposited and are sealed in the presence of the depositor or his authorized representative.
SEBI advised that at least 4 samples are taken of which one sample is used for analysis, one is kept with Warehouse Service Providers for comparison purpose, one is given to the depositors while one is kept for record/lab reference purpose with the objective to resolve potential disputes arising with respect to the quality of goods.
In furtherance to the varied approaches are being followed by different exchanges, SEBI has brought changes in respect of the same confirming compliance to the requirements of trading agricultural products over exchanges.