KATHMANDU: The commercialisation of agro sector can be possible with the help of fair price discovery and effective market-warehousing and supply chain management. Being an agri-economy, Nepal can benefit from the commodity exchange.

However, the lack of transparency in the commodity exchange has set up various hallenges, said experts here today.

The government should recognise and bring a policy for the commodity and futures market, said Mercantile Exchange Nepal Limited (MEX) chief executive officer Jitesh Surendran.

“Price-signals given by long-duration new-season futures contract can help farmers to take decision about cropping patterns and the investment intensity of cultivation,” said, Surendran adding that the government should have an efficient tax system for the benefit of clients as practiced in other countries, especially India.

“We are keenly looking forward to a warehouse receipt system as it would develop the bill discounting market in the country,” said Laxmi Bank chief executive officer Suman Joshi.

According to Joshi, the warehouse receipt system would resolve disputes and since it would be accepted by commercial banks as collateral security for grant of loan against goods stored in the warehouses, it would be beneficial for farmers in the long run.

He added that currency future markets would be equally exciting for bankers in Nepal.

Ace Development Bank chief executive officer Surendra Pandey strongly stressed on the need for a regulatory body to supervise the futures markets to protect these.

He added that the regulatory body should be given adequate powers so that there is no compromise in the standardisation of products.

Entrepreneur Anand Bagariya said that warehouse receipts can act as catalysts in commodity exchange which in turn can develop the standard of products. He added that modern storage is not only about quantitative storage options but also about qualitative storage.

Nepal Bankers’ Association president Sashin Joshi said it would be very useful to

exporters as it provides an advance indication of prices likely to prevail and thereby help them in quoting realistic prices and secure export contracts in a competitive market.

He added that it would also ensure balance between supply and demand throughout the year and lead to an integrated price structure throughout the country.