warehousing & warehouse receipts in commodity futures marketing
DESCRIPTION
WAREHOUSING & WAREHOUSE RECEIPTS IN COMMODITY FUTURES MARKETING. N. K. CHOUBEY. NEED FOR DEVELOPMENT OF LICENSED WAREHOUSING. WIDESPREAD RURAL INDEBTEDNESS OF FARMING COMMUNITY. ROYAL COMMISSION ON AGRICULTURE, 1928 RECOMMENDED ESTABLISHMENT OF LICENSED WAREHOUSES. - PowerPoint PPT PresentationTRANSCRIPT
• WIDESPREAD RURAL INDEBTEDNESS OF
FARMING COMMUNITY.
• ROYAL COMMISSION ON AGRICULTURE, 1928
RECOMMENDED ESTABLISHMENT OF LICENSED
WAREHOUSES.
• ALL INDIA RURAL CREDIT SURVEY COMMITTEE,
1954 REITERATED THE NEED FOR
WAREHOUSING IN PUBLIC SECTOR.
NEED FOR DEVELOPMENT OF LICENSED WAREHOUSING
• AS WAREHOUSING NEEDS HUGE CAPITAL INVESTMENT WITH LOW RETURNS PUBLIC SECTOR WAS INEVITABLE
• AGRICULTURAL PRODUCE (DEVELOPMENT & WAREHOUSING CORPORATION) ACT, 1956 WAS PASSED AND LATER ON REPEALED AND REPLACED BY WAREHOUSING COPORATION ACT, 1962 FOR CREATION OF WAREHOUSING.
• CENTRAL & STATE WAREHOUSING CORPORATIONS (CWC & SWCs) WERE ESTABLISHED UNDER THIS ACT.
NEED FOR DEVELOPMENT OF LICENSED WAREHOUSING
• THE STATES ENACTED UNIFORM WAREHOUSE
ACTS & RULES DURING 1956 – 1960 FOR
SUPERVISION AND REGULATION OF
WAREHOUSING OPERATIONS.
• IT PROVIDES FOR SOUND AND RELIABLE
WAREHOUSE RECEIPT SYSTEM AT PAR WITH
DEVELOPED ECONOMIES.
LICENSING OF WAREHOUSES FOR SOUND WAREHOUSE RECEIPT SYSTEM
AN ECONOMIC ACTIVITY
CONCOMITANT TO AGRICULTURE
CLOSELY LINKED WITH AGRO
INDUSTRIAL DEVELOPMENT & TRADE
WAREHOUSING
WAREHOUSING INFRASTRUCTURE(CAPACITY IN MILLION TONNNES A ON 01-07-2005)
DISCRIPTION CWC SWC TOTAL
TOTAL NO. OF 498 1599 2097WAREHOUSE
CAPACITY 10.42 14.55 24.97
CAPACITY 10.42 14.55 24.971MT=6Sq.FT
• SCIENTIFIC STORAGE FACILITIES FOR MORE THAN 400 COMMODITIES.
• MARKETING FACILITIES (HANDLING & TRANSPORTATION THROUGH OUTSOURCING)
• CUSTOM BONDED WAREHOUSES.
• CONTAINER FREIGHT STATIONS AND INLAND CLEARENCE DEPOTS.
• AIR CARGO COMPLEXES.
• PEST CONTROL SERVICES.
SERVICES OFFERED BY CWC
WHAT IS WAREHOUSE RECEIPT(WR)
AS PER STATE WAREHOUSES ACT, WR
MEANS A “RECEIPT” IN THE PRESCRIBED
FORM ISSUED BY A LICENCED WAREHOUSE
MAN TO A PERSON DEPOSITING GOODS IN
THE WAREHOUSE
WAREHOUSE RECEIPTS A TOOL FOR :
SOFTENING THE RIGIDITY INVOLVED IN HANDLING COMMODITIES
BETTER CREDIT DELIVERY.
BETTER LOAN RECOVERY FOR FINANCIAL INSTITUTIONS.
CONVENIENCE IN ASSET MANAGEMENT.
MARKET INSTRUMENT FOR DEVELOPING INDIAN ECONOMY.
WAREHOUSE RECEIPT SYSTEM CAN
PLAY SIGNIFICANT ROLE IN
REDUCING THE PRESSURE ON THE
GOVT. TO CARRY LARGE INVENTORY
OF THE AGRICULTURAL PRODUCE.
SOUND & RELIANCE WAREHOUSE RECEIPT SYSTEM
WAREHOUSEMAN’S LIABILITY
IT IS THE LIABILITY OF THE WAREHOUSEMAN
TO RETURN ON DEMAND OR SURRENDER OF
THE WR, THE GOODS OF THE SAME QUALITY
AND QUANTITY (SUBJECT TO NATURAL LOSS
DURING STORAGE DUE TO SHRINKAGE ETC.)
WHICH WERE TENDERED FOR STORAGE BY
THE DEPOSITOR.
WORKING OF WAREHOUSE RECEIPT SYSTEM
WAREHOUSE
WAREHOUSERECEIPT
PLEDGING
BANKING/FINANCIAL INSTITUTION
INSPECTIONGRADING
INSURANCE
PRODUCEREXPORTER
PROCESSOR
TRANSFERABILITY OF WAREHOUSE RECEIPT
STATE WAREHOUSE ACTS PROVIDE “NEGOTIABLE / NON-NEGOTIABLE” IN THE PRESCRIBED FORM OF WAREHOUSE RECEIPT.
THE STATE WAREHOUSES ACTS ALSO PROVIDE THAT UNLESS OTHERWISE SPECIFIED IN THE WR, A RECEIPT ISSUED BY WH MAN IS TRANSFERABLE BY ENDORSEMENT AND SHALL MAKE ITS LAWFUL HOLDER TO RECEIVE THE GOODS SPECIFIED IN IT, ON THE SAME TERMS AND CONDITIONS, ON WHICH THE PERSON WHO ORIGINALLY DEPOSITED THE GOODS, WOULD HAVE BEEN ENTITLED TO RECEIVE THEM.
CONTD./--
WR IS A DOCUMENT OF TITLE TO GOODS AS PER THE SALE OF GOODS ACT, 1930.
THE GOODS COVERED BY A NEGOTIABLE WAREHOUSE RECEIPT CAN BE TRANSFERRED BY ENDORSEMENT ON THE WR AND ITS DELIVERY TO THE ENDORSEE.
A PERSON TO WHOM WAREHOUSE RECEIPT IS NEGOTIATED, ACQUIRES A TITLE TO THE WAREHOUSE RECEIPT, THE RIGHT OF POSSESSION OF THE GOODS COVERED BY THE WAREHOUSE RECEIPT AND THE RIGHT TO REQUIRE THE WAREHOUSE MAN TO HOLD OR DELIVER THE GOODS ACCORDING TO THE TERMS OF WAREHOUSE RECEIPT.
CONTD./--
HENCE, THE WR ENJOYS THE ADVANTAGE OF NEGOTIABLE INSTRUMENT.
BUT AS PER NEGOTIABLE INSTRUMENT ACT, 1881, WAREHOUSE RECEIPT IS NOT A NEGOTIABLE INSTRUMENT.
WHEREAS RAILWAY RECEIPT, LORRY RECEIPT, BILL OF LADING THOUGH NEGOTIABLE BY ENDORSEMENT ARE ALSO NOT NEGOTIABLE INSTRUMENTS AS PER N.I.ACT, 1881.
ALL THESE INSTRUMENTS ARE ACCEPTED BY COMMERCIAL BANKS AS COLLARAL / SECURITY AGAINST GOODS COVERED BY THEM.
WAREHOUSING COMPANIES AS INDEPENDENT AGENTS
THE LEGISLATIONS PROVIDE THAT NO WAREHOUSING ENTITY WILL TRADE IN GOODS TO AVOID CONFLICT OF INTEREST.
THE STATE WAREHOUSE ACTS ALSO PROVIDE LICENSING OF SAMPLERS, GRADERS AND WEIGHERS.
IN PRESENT TIMES THE WAREHOUSING ENTITIES NEED TO BE ADEQUATELY CAPITALISED AND PROFESSIONALLY MANAGED.
WAREHOUSING COMPANIES AS INDEPENDENT AGENTS
EVERY WAREHOUSEMAN RESPONSIBLE FOR ALL NECESSARY PRECAUTIONS FOR SCIENTIFIC STORAGE.
EVERY WAREHOUSEMAN RESPONSIBLE TO TAKE INSURANCE OF THE GOODS STORED WITH HIM.
WAREHOUSEMAN CAN NOT LEND MONEY AGAINST GOODS IN WAREHOUSE.
WAREHOUSING COMPANIES AS INDEPENDENT AGENTS
THE INSPECTION, SAMPLING, WEIGHMENT AND GRADING BY A LICENCED WAREHOUSING COMPANY ARE MORE DEPENDABLE THAN COLLATERAL MANAGERS AS OUTSIDERS.
THE NEXT GENERATION IN WAREHOUSE RECEIPTS TO BE THE WAREHOUSE WARRANTS WHICH CAN BE MORE SOFTLY TRADED THAN NEGOTIABLE WAREHOUSE RECEIPTS.
THE GENERAL CONDITIONS FOR OPERATION OF WAREHOUSE WARRANTS CAN BRING VALUE ADDITION IN WAREHOUSING ACTIVITY.
ADVANTAGES OF WAREHOUSE RECEIPT SYSTEM
PROVIDES FINANCIAL FLEXIBILITY TO
FARMERS/ PROCESSORS /TRADERS.
SAVES FARMERS FROM DISTRESS SALES
DURING CROP SEASON.
ENHANCES VOLUME OF BUSINESS AND
PRODUCTIVITY.
REDUCES SEASONAL PRICE VARIATIONS.
IMPROVES EFFICIENCY OF MARKETING
SYSTEM.
NEGOTIABILITY OF THE WAREHOUSE
RECEIPTS IS TO BE USED FOR TRADING, OR
ACCEPTED FOR DELIVERY AGAINST A
DERIVATIVE INSTRUMENT SUCH AS FUTURE
CONTRACT.
COMMODITY EXCHANGES NEED TO BE
DEVELOPED AS THE MARKET PLACE FOR
TRADE IN WAREHOUSE RECEIPT.
HOW ?
TRADE IN PHYSICAL SAMPLES
ISSUE OF GRADING CERTIFICATE (GC)
ACCREDIT INDEPENDENT & CREDIBLE WAREHOUSES FOR ISSUE OF GC AND WR
TRADE ON WR
OBSTACLES IN USAGES OF W.R. IN INDIA
LACK OF AWARENESS AND TRAINING.
INAPPROPRIATE TRADING PRACTICES.
LACK OF APPROPRIATE LEGAL, REGULATORY AND INSTITUTIONAL ENVIRONMENT TO SUPPORT WR.
LIMITED FAMILIARITY OF BANKING COMMUNITY WITH WAREHOUSE RECEIPT .
REQUIREMENT FOR TRADE IN WR
RELIABLE AND REPUTABLE WAREHOUSE
OPERATORS WITH GOVT. REGULATION.
APPROPRIATE WAREHOUSING AND
COMMERCIAL LEGISLATION FOR
WAREHOUSE WARRANTS AND DEMAT.
FUTURE LEGISLATION
• NEGOTIABLE WAREHOUSE RECEIPTS BILL AS A
PART OF REFORMS IN THE FIELD OF
AGRICULTURAL MARKETING IS UNDER ACTIVE
CONSIDERATION OF GOVT. OF INDIA.
• NEW LEGISLATION TO THIS EFFECT IS LIKELY,
WHICH WILL ENHANCE THE COMPETIVENESS
OF INDIAN AGRICULTURE IN THE DOMESTIC AS
WELL AS GLOBAL MARKET.
• NEED TO ADOPT MARKET -ORIENTED POLICIES
• TO WIN THE CONFIDENCE OF CUSTOMERS.
• EXPLORE NEW AVENUES WHILE CONTINUING
TO PURSUE THE BASIC OBJECTIVES OF
PROVIDING SUPPORT TO AGRICULTURAL
SECTOR AND TRANSLATE NEW EMERGING
OPPORTUNITIES INTO COMMERCIAL REALITIES.
STRATEGIES TO BE ADOPTED BY WAREHOUSING CORPORATIONS :