INTRODUCTION Among the investment avenues, commodity futures trading is a fast growing sector with huge untapped potential, along with the financial markets. The major difference between commodity and financial markets is that, in commodities futures physical delivery takes place where as in the capital market it does not. In these markets, there are farmers, industrialists, warehouses, consumers, dealers and traders, who buy and sell commodities. There are warehouses, which stores commodities and there are consumers, who consume them eventually. In the Indian context, warehouses are necessary for the commodity sector and commodity future trading especially for farmers because agricultural commodities constitute a major segment of the Indian economy. When the role of warehouse is necessary The role of a warehouse is most necessary in the spot market where a farmer after having harvested his crop sells them to commission agents who in turn sells them to a Mandi. The Traders in Mandi may then sell it to a large consumer or to a trader who in turn will sell it to some other consumer, industry, exporter or miller at the right time and right price. The Goods during this period are stored in the warehouse. It is seen that today 80% of the warehousing capacity is used by the Government for storing various commodities under the Public Distribution System and for storing fertilizers Commodities form almost 58 percent of India's Gross Domestic Product out of which 22 percent is agriculture, and two third of the population depend up on agriculture for livelihood. Warehousing forms the basic platform of delivery based trading in commodity futures. Warehouses play an important role in commodities futures, as most of trades are settled with delivery. That is, if the seller chooses to handover the commodity instead of the difference in cash, the buyer must take physical delivery of the underlying asset. Hence, warehouses play a significant and decisive role in the proper and efficient functioning of commodity futures trading. Warehousing system and warehouse receipts act as the chain, connecting farmers with the future market and credit financing. Using this facility, the farmer can hold the commodity to future profit and can make money for giving the inputs and day-to-day expenditure. Buyers and sellers have different roles in a transaction. So an impartial collateral manager is essential to act as an interface between buyers and sellers. Warehouse assayer acts as collateral manager who is neutral, reliable and creditworthy to both parties.
There are several inefficiencies occurred in the traditional supply chain. First, the only means for price discovery is at the mandi. Although farmers might forecast the price from the previous days, they cannot know the real price in advance before they reach the mandi. In this way, they have to incur considerable amount of logistic costs. Without real-time information about price and demand, farmers cannot make effective decision about when/where/how much to sell or produce. Since the selling price is not discovered before reaching the mandi, the farmers earn low profits or are even in deficit, leaving them in...
It is explained within these definitions commodities are often sold in future contracts by investors, which is an agreement to buy or sell a commodity in a designated future period at a price agreed upon at the commencement of the contract by the buyer and seller. Future contracts are standardised according to the quality, quantity, delivery time and location of the commodity. A future contract differs from an option, an option gives one of the parties a right and the other an obligation to buy or sell. While a future contract represents a requirement of parties, one to deliver and the other to accept delivery. A future contract is part of a class of securities called derivatives, named because securities derive their value from the worth of an underlying investment ( Farlex 2011).
Our large purchasing power allows us the opportunity to consolidate our purchases and create futures contracts for a better price. This can help sustain our margins in a weaker economy, or hedge against a great increase in coffee purchases driving the demand and price of beans up.
...pital resources like distribution vehicles and storage warehouses should be outsourced to help reduce the high cost of operation which in turn can lead to reduction of its products price. The company should concentrate on product development and evolution and delegate distribution roles to outsourced firms. Such initiatives have worked well in the new Indian market and should be implemented in other areas.
Our large purchasing power allows us the opportunity to consolidate our purchases and create futures contracts for a better price. This can help sustain our margins in a weaker economy, or hedge against a great increase in coffee purchases driving the demand and price of beans up.
Just as in the emerging markets anywhere in the world, distribution networks in India too tend to be unique and disjointed, and this has been highlighted by C.K. Prahlad in his book, ‘The Fortune at the Bottom of the Pyramid’. He says that distribution systems that reach the BoP are critical for developing this market and that innovations in distribution are as critical as products and process
Warehouse receipt based financing is a kind of inventory financing, wherein loans are given to manufacturers and processors (borrower), by way of pledge of warehouse receipt i.e. against commodities held as collateral. The borrower (eg: farmer) deposits a certain amount of goods into a warehouse deposit and regulatory authority (WDRA) accredited warehouse in exchange for a warehouse receipt which has all the necessary details like quality and quantity of the produce. The warehouse receipt can then be transferred to a bank, which provides a loan equivalent to a certain percentage, generally up to 70-75 per cent of the value of the collateral with the warehouse. At maturity, the borrower sells the commodity to a buyer who then either pays the bank directly or pays the borrower who then repays the bank. On receipt of the funds or an acceptable payment instrument, the bank surrenders the warehouse receipt to either the buyer or the seller (depending on the specifics of the transaction), who then submits the warehouse receipt to the warehouse, which releases the commodity. In case of default on the loan, the bank can use the warehouse receipts in its possession to take delivery of and sell the
Storage and transportation of stock are important activities that connect all three parts of the supply chain. To work on the logistics aspects of business, LeanFoods employs specialist transportation and storage companies. TDG is one such partner of LeanFoods, for storing and transportation of pallets of LeanFoods cereals. This enables LeanFoods to concentrate on its specialist area of manufacturing cereals and other food products. To reduce the distribution costs and keep the products competitive, LeanFoods shares transportation with another manufacturer, Kimberley Clark. Sharing of transportation helps in reducing the number of part-full or empty vehicles on the road. This system not only saves time and road miles but also provides additional benefits of reducing CO2 emissions.
Supply Chain Management (SCM) plays one of the most primitive roles in determining the successful running of a business, especially the one that deals with food sector. Having an efficient and effective supply chain is a prerequisite to maintain the quality of product, as well as the process when we talk about food industry. Reverse Logistics, being an integral part of SCM, is usually neglected, specifically in the Indian industry given a few important constraints. The 5 major attributes of Reverse Logistics (Recall, Return, Recycle, Review and Repair) are necessary considerations for effective Business Operations.
For the case undertaken in this thesis work, the result we got according to the given options by the management of Lafarge Surma Cement Ltd. Indicates that, distributor storage with last mile delivery is the best choice of the distribution network. It is followed by retail storage with customer pick up and Manufacturer/Distributor storage with customer pickup. The selected network is tailored to match the characteristics of the product and the performance along with the needs of the customer. From the analysis, it is a suitable option for fast moving items for which some level of aggregation is beneficial. In this network, warehouse is much closer to the end customer and there is a requirement of high number of warehouses than other options.
Ware house: shiv company needs to use proper ware house for storing products and better super vision. company needs to use both public ware house and private ware house .its useful for transportation facility. Ware house will come under channel of distribution.
Establishing food retailing in India comes with complications, some of these are due to politics and some are cultural. The first issue that most of the Indian community prefers to purchase their goods from local markets and farmers as opposed to large supermarkets. The articles mentioned that openings of
Storage facilities and packing houses for handling fresh produce in developing countries have poor logistics (Kader, 2010). An example is India where inadequate storage facility is the common problem with majority of farmers (Bhardwaj et al, 2012)
Metals are classified as either industrial metals or precious metals. Industrial metals include base and ferrous metals such as aluminum, copper, nickel, zinc, iron, steel, lead, titanium, cobalt, tin, etc. These physical goods are generally used as production inputs. Precious metals are those that are rare and have high economic value. Precious metals include gold, silver, platinum, palladium, etc. While precious metals can also be used in an industrial capacity, they are generally considered to have intrinsic value. The higher value is driven by many factors including rarity, uses in industrial processes, and as an investment commodity. Investing in metals can be done either by buying the physical asset itself or through futures contracts. Another way to trade in metals is to invest in companies that explore or produce these metals, such as miners. As the economic environment continues to be uncertain, investors have tended place their funds in precious metals because they have an inverse relationship with currency strength and serve as a hedge against infla...
Distance between the traded regions and means of transportation mainly influence the transaction cost. The different geographical location of the market that is very important in agriculture, as agricultural products are awkwardly large and easily perishables which is likely ...