Company Profile

The National Collateral Management Services Limited (NCMSL) is the country's leading organization providing a

bouquet of services to manage risks across various stages of commodity and inventory handling under a single

umbrella. Incorporated in 2004, under the provisions of the Indian Companies Act, 1956, NCMSL is a governed by

an independent and professional Board. Each of our promoters and shareholders are either reputed and leading

banks or organizations, viz . ACE Geneva, Bank of India, Canara Bank, Corporation Bank, HAFED, Indian Bank,

IFFCO, HDFC Bank, Karur Vysya Bank, NCDEX, Punjab National Bank and Yes Bank. Our pan-India operations

help us provide commodity handling and risk management services to clients across the country. We are geared to

handle operations encompassing the sale, purchase, trading, and movement of commodities & inventories. 

Our Vision

To be the most trusted and innovative risk manager and supply chain solution provider for commodities and

inventories. Our Mission

To empower stakeholders in commodities and inventories to deal with associated risks.

 Our Objectives

To provide integrated trading and supply chain services

To provide comprehensive and effective collateral and risk management services

To provide linkages for growers & traders with spot and future markets

To provide accurate and incisive market intelligence and advisory services

To provide credible and low cost testing and certification services

To create a safe and liquid warehouse receipts market and promote commodity financing

Why UsStorage & Preservation

Procurement & Supply Chain

Collateral Management

Testing & Certification

Trade & Commodity Intelligence

Weather Intelligence

Crop Intelligence

   

  Storage & Preservation 

Are you looking for Storage solutions nearer to your locations? Your Search ends here….

 • NCMSL has presence in over 50 locations across the country

• Scientific warehousing

• Proper ventilation and aeration facilities

• Qualified and professional staff

• Uniform and standard operating procedures across all locations

• Qualified staff for State – of – the art fumigation services

• Strong IT support with centralized database connectivity for MIS requirements of clients

• Rigorous internal audit processes

• Funding services

• Strong linkages for procurement, testing & certification

• Warehouse Receipt Financing

   More Info TOP

  

  Procurement & Supply Chain 

Are you looking for sourcing commodity directly from farmers? Your Search ends here….

 • NCMSL is the first private sector institution permitted by Government of India to procure food grains at MSP

• Have procured over two million MT of commodities from about 5 lac farmers during 2005 – 08

• Have direct reach to the farmers thus reducing the actual cost of procurement

• Wider presence in all the major mandis of the country

• Experience in handling large volumes along with storage and transportation

• Experienced and specialized manpower

• Cost effective operation models

   More Info TOP

  

  Collateral Management 

Are you looking for commodity finance against your inventories? Your Search ends here….

   • We are the pioneer collateral manager in the country having tie – ups with over 20 major banks, can facilitate

lending at most competitive interest rates.

  We provide…

• 24X7 strict supervision of quality and quantity

• Timely and multi-stage financing

• Surprise and regular audits

• Use of risk transfer mechanism

• Reduction in documentation and turnaround time (TAT) by use of IT and professional management

   More Info TOP

    

  

  Testing & Certification 

Did you know?

CommGrade - The Testing & Certification arm of NCMSL handled the largest number of agro – commodity samples

in the last three years.

Team

Skilled, Trained, Dedicated and Knowledgeable professionals with right "Attitude" adore the potals of "CommGrade". It is composed of a mix of employees with strong analytical skills in the following fields: Chemistry, Biochemistry, Microbiology, Biotechnology, Food Technology and Management.

Accreditations

  Accredited by : ISO 17025 - 2005 by NABL, in the field of Chemical Testing

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  Accredited by : ISO 17025 - 2005 by NABL, in the field of Biological Testing

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Recognitions

  Recognized by Spice Board of India

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Certifications

  Certified by : ISO 9001 - 2008

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Memberships

• AOAC (Association of Analytical Communities)• AACC (American Association of Cereal Chemist)• AMI (Association of Microbiologists of India)• AOFST (Association of Food Scientists & Technologist(India))• IOPEA (Indian Oil Seeds & Produces Exporters Promotion Council)

   More Info TOP

  

  Trade & Commodity Intelligence 

Did you know?

• NCMSL provided technical consultancy and trading services to the largest grain hedge transaction by an Indian

corporation on global commodity exchanges (value over USD 5 billion).

• As a technical consultant we facilitated the first “physically settled OTC Call options market” for agro

commodities in the country.

Are you into regular import - export business?

• NCMSL can facilitate freight risks hedging on global OTC markets, which is reported to be first of its kind by any

domestic firm.

   More Info TOP

    

  

  Weather Intelligence 

Did you know 40 to 80 percent of all business activities are affected by the weather?

Weather risks faced by various industries:

 

Industry Weather Element Risk

Energy Industry TemperaturePrecipitationRelative Humidity

Lower sales during warm winters or cool summers; adequate rainfall for agricultural purpose

Energy Consumers TemperaturePrecipitationRelative Humidity

Higher heating/cooling costs during cold winters and hot summers

Beverage Producers Temperature Lower sales during cool summers

Building Material Companies PrecipitationTemperature

Lower sales during monsoon / severe winters (construction sites shut down)

Construction Companies Temperature SnowfallPrecipitation

Delays in meeting schedules during periods of poor weather

Agricultural Industry TemperaturePrecipitation

Significant crop losses due to extreme temperatures or catastrophic rainfall or drought

Salt Industry Solar radiationTemperaturePrecipitationRelative Humidity

Lower revenues during low temperature or rainfall which extends the drying time.

Hydro-electric power generation

Precipitation Lower revenue during periods of drought

Wind Turbines Wind Speed Lower revenue during no or very little wind speed

Transport Industry Precipitation Catastrophic rainfall disturbs rain or road transport; hence delay in goods delivery

 • We are the leading provider of weather data to the energy, weather insurance and agricultural commodities

markets other than government agencies.

• We provide the most reliable and timely information for weather risk transactions.

• We have developed a leading-edge set of techniques and algorithms to clean and enhance historical and daily

weather data, in consultation with various meteorological experts

 

More Info TOP      

  

  Crop Intelligence 

Did you know?

NCMSL provides information about crop health and development with focus on:

• Remote sensing technology provides information about crop health, by regularly monitoring crops to Agricultural

producers (Farmers)

• Commodity Traders and the Food Industry receive more detailed and timely information on crop development

and yield predictions.

• We offer tools and services for an effective geographical modeling of agriculture insurance risks.

• Crop maps provided by us determine accurately what farmers have planted and also help in determining the

premiums and risk profiles.

• We support the loss adjustment process by providing quick and reliable information about damaged areas.

ur ServicesStorage & Preservation - Headed by Mr. Sri Ranga Moturi

Commodities in our storage

Our Non - Agri 3PL Solutions

Our Warehouses

Warehouse Investment Plan

Our USP

Feedback

NCMSL offers modern, scientific and IT enabled storage and preservation services for the entire range of agri and

non - agri commodities. Our warehouses are spread across the country in 12 states and over 50 locations, and deal

with as many as 42 agricultural commodities. Our warehouses strictly adhere to scientific norms, and are accredited

by the National Commodity and Derivatives Exchange (NCDEX) for accepting physical deliveries of commodities

traded in the commodity futures market.

Our Warehouse Receipts (WHRs) issued against commodities deposited in our warehouses are treated on par with

the receipts of CWC/SWC, and are accepted by various Banks for funding. Banks lend against our WHRs on the

strength of our scientific storage and preservation practices.

Our warehouses are certified under ISO 9000: 2001 for our quality management systems.

  Commodities in our storage

• Wheat • Rice • Jeera

• Maize • Barley • Sugar

• Jowar • Chana • Guar Seed

• Urad • Tur • Guar Gum

• Lemon Tur • Soyabean • Pepper

• Mustard • Chillies • Honey

• Shrimp • Turmeric • Mulberry

• Rubber • Coffee • Cotton Seed

• Cotton Seed Oil Cake • Mentha Oil    

• Medium Staple Cotton • Raw Silk             

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  Our Non - Agri 3PL Solutions

  Top of page

   

Our Scope of Services

Our Strengths

NCMSL focuses on providing multi-model single window supply chain solutions for all verticals – telecom, FMCG, consumer durables white goods, industrial, automobile, pharma and food processing across India. With value added services such as reverse logistics, vendor managed inventory, hub and spoke distribution management etc our comprehensive range of services

would minimize the cost to clients in their distribution management.

 

Our Scope of Services

Following are the scope of services we can provide with last mile delivery anywhere in India

• Order management

• Warehouse management

• Transportation management

• Replenishment management

• Inventory management

• Buyer Consolidation management

• Retail supply chain management

• System Integration services

• Distribution management

• Shelf life management

• Information management

• Kitting/ Re-packaging/ Labeling services

• Packaging and Preservation

• Replenishment management

• Billing and Account receivables

• Return and re-work services

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Our Strengths

Capacity to invest capital to provide customized solutions and experienced senior professionals with expertise in this core, NCMSL’s logistics centers can offer multi user warehousing facilities, with “the pay as you use concept". The centers are proposed to be distinguished by state of the art infrastructure with palletized storage facility, strong IT back up and mechanized handling. Currently we handle more than 300 warehouses across India covering all strategic locations measuring more than 1 million sq ft space and over 500 dedicated professionals. Our team of trained and experienced logistics, engineering & operation personnel will assist to source, set-up and equip the warehouses based on the customer’s requirements. NCMSL offers comprehensive suite of supply chain solutions for all sectors. We design customer centric logistics solutions that help manage the logistics challenges and issues faced by our customers, especially for those that are new to the Indian market. We offer consultation on warehouse selection, route optimisation, storage space optimisation, asset utilisation, appropriate choice of equipment, capacity choice and logistics budgeting.

Our ServicesProcurement & Supply Chain - Headed by Mr. Rosaiah Yeluri 

  - Headed by Mr Vishal Kumar

   

Our USP

Feedback

NCMSL is the first private procurement agency engaged by the Government of India (GOI) to procure commodities

under the Minimum Support Price (MSP) operations. We are the leading private service provider to the Food

Corporation of India (FCI) in the States of Orissa, Madhya Pradesh, Bihar, Rajasthan and Uttar Pradesh. NCMSL

has procured and handled close to two million tonnes of paddy and wheat on behalf of FCI under MSP operations

since 2005-06. Through these services alone we have reached more than 0.5 million farmers.

Our procurement services are provided through 40 regional offices, 500 centres / Mandis and 700 bank accounts. 

Our procurement team consists of agri - professionals with experience in handling agricultural commodities in

various parts of the country. With over three years experience in handling logistic-intensive procurement operations

for the FCI, STC, Private Companies etc, NCMSL is also fully geared to offer procurement services to Corporate &

Traders.Our ServicesCollateral Management - Headed by Mr.   Krishna Mohan Singh

Warehouse Receipt Financing

Inspection & Verfication / Stock Audit

Our Location

Our USP

Feedback

We have been a pioneer in providing collateral management services to banks. These services have assisted

industries, traders and farmers in financing their capital requirements at all stages of the supply chain, ranging from

pre-harvesting to the marketing and export stages. We also offer premium services for working capital financing in

commodity-based industries, especially agro-based industries.  In providing collateral management services, we

work in partnership with 16 leading banks and in more than 200 locations across the country.

  Warehouse Receipt Financing

NCMSL offers modern, scientific and IT enabled storage and preservation services for the entire range of

agricultural commodities. Our warehouses spread across the country issue credible and reliable warehouse receipts

(WHRs) and are accredited by the National Commodity and Derivatives Exchange (NCDEX) for accepting physical

deliveries of commodities traded in the commodity futures market.

We are present in 12 states across India and our warehouses manage as many as 42 agricultural commodities. Our

WHRs issued against commodities deposited in our warehouses, are treated on par with the receipts of CWC/SWC,

and are accepted by various Banks for funding.  Banks lend against our WHRs on the strength of our scientific

storage and preservation practices.TOP

   Inspection & Verification / Stock Audit

As specialist in third party inspection the company has adequate trained and experienced inspectors in most cities

of the country. Our inspectors are highly trained who have good understanding of business processes. At

manufacturing or processing premises we provide the following professional services as per internationally

accepted practices:  

• Physical verification of stocks

• Verification of condition of storage

• Valuation of stocks

• Valuation of obsolete stock

• Age-wise categorization of stocks

• Evaluation of the stock management

• Reconciliation of stock statements with physical balances

• Verification and evaluation of sundry creditors

Our ServicesTesting & Certification - Headed by   Dr Ganesh Ramamurthi

CommGrade

Services

Major Lab Instruments  

Our Labs

Our USP

Feedback

T & C Services started in 2005 under the brand name “CommGrade”. It provides Inspection & Testing of Food, Agricultural and allied products. It has a network of 32 locations where Quality Control Activities take place. There are 8 network labs supporting the central laboratory at Hyderabad. It supports and serves

Farmers, Traders, Manufacturers, Exporters, Importers, Consumers and Government institutions.

   CommGrade

 Our Quality Policy

NCMSL-CommGrade is committed to meet the customer and the applicable regulatory requirements in the Testing & Certification services of water, food and agricultural products through developing human resources, applying the best technologies, continually improving quality management system and processes and by complying with the applicable standards

Our Commitment

To provide quality analytical data, strictly adhering to National and International Standards

Our Quality Assurance

Analysis at CommGrade is performed under the strict vigil of Quality Inspection Group. The data generated is doubly checked by QIG team members. Internal Quality Control programmes conducted for assessing/improving the capabilities of analyst. Participation in proficiency testing / Interlab comparison programmes is an on-going practice at CommGrade 

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  Services

Testing Services - Products Tested

Types of Testing  

Spectrum of Testing Capabilites

Inspection Services

Certification Services

Data Management Services

  Testing Services - Products Tested   • All Food Products - Raw, finished, tinned / canned

• Agricultural Products Spices & Condiments, Cereals & Pulses, Oil Seeds, Nuts, Food Grains, Dals and Rice

• Fruits, Vegetables, Fruit Juices, Tobacco, Leaves & their products

• Oils & Fats

• Sugar & Sugar based confectionery products

• Tea , Coffee and its products

• Beverages (alcoholic and non alcoholic), Soft drinks

• Milk & Milk products

• Water

• Marine Products

• Egg & Poultry Products 

• Soil

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  Types of Testing  

• Pesticides residues 

• ETO Sterilization Residues

• Drugs residues /Antibiotics

• Color Contaminants

• Melamine

• Active Ingredients in Herbal products

• Myco toxins & Natural Toxins 

• Microbiological tests

• Toxic Elements & Minerals

• Nutritional Labeling

• Fatty acids & Cholesterol

• Vitamins, Amino Acids & Antioxidants

• Physical & Physico-chemical tests

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  Spectrum of Testing Capabilities 

• Aflatoxins B1,B2,G1 and G2  in Ground nuts, Maize, Spices and other food and Agri products

• Aflatoxin M1 in Milk and Milk Products

• ETO sterilization residues in Spices

• Melamine in Milk & Milk products

• Antibiotic residues in Fishmeal, Shrimp, Whole Egg, Egg powder, Feed, Tissue, Body fluid, Excreta and Water

• Antibiotic residues in Milk & Milk products

• Sudan I, II, III,  IV, Red G, Red B, Red 7B & Orange G in chilli & its products.

• Pesticide residues in Grapes, Pomegranates, Mangoes and its pulps.  

• Pesticide residues in Spices, Food grains, Nuts & Feeds (Dry Products).

• Fosetyl Aluminum in grapes & pomegranates. 

• Macrolides in Egg Products, Poultry, Meat & Marine Products

• Pesticide residues in Milk & Milk products

• Pesticide residues in Fatty foods/Oil seeds

• Pesticide residues in Fruits, Vegetables and Fruit juices

• Pesticide residues in water 

• Vitamins in Processed foods 

• Fatty Acids & Cholesterol in Processed foods 

• Nutritional Labeling in Processed foods 

• Elemental Analysis in Water, Fruits, Vegetables, Fruit Juices, Milk, Milk products and other food and Agri products

etc

• Microbiological Tests including E. coli, Salmonella, TPC, Coliforms, Yeast and Mold, etc. in all Food & Agricultural

products

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  Inspection Services 

• Sampling of commodities at different locations across the country

• On-Site Verification of Quality and Quantity

• Verification of Storage Facilities

• Quality Monitoring of Stored Products

• Vendor Identification and Evaluation

• Inspection of Vendor Supplies

• Food Hygiene Audit

• Pre & Post shipment inspection

• Inspection during production (Online processing inspection)

• Quantity inspection and sampling

• Container Stuffing and Sealing

• Loading / Unloading supervision of Trucks, Trolies, Containers, Rake and Vessel.

• Dispatch operations

• Procurement inspection & testing

• Quality testing and analyses of product as per countrys specific standards/international standards/contractual

specifications

• Consignment Certification as per countrys specific standards contractual specifications

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  Certification Services 

NCMSL - CommGrade will in consultation with the quality team of the client will undertake the following:

• Map and document all the processes

• Align all the activities in the organization in line with the chosen standard (i.e., ISO 9001:2008 or HACCP etc)

• Provide training for implementation of the processes for attaining quality goals and objectives

• Conduct training so as to make the quality team self sufficient in terms of conducting internal audit

• Conduct internal audits and identify areas of strength and weakness

• Enable and facilitate conducting management review

• Ensuring that all systems and processes are duly complying with the chosen standard  

• Provide an expert external audit prior to certification audit

• Enable External Certification

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  Data Management ServicesProvides Off-shore back end Data Management, Sample Management, Project Management and Quality Assurance Services to Labs.

CommGrade CapabilityA variety of back-end services such as the following can be skillfully handled by CommGrade: Data Reporting and Validation, Reviewing Reports, Sample Login, Method Validation, Handling QC documentation viz. MDLs, IDOCs, Training records etc, Draft and Revise SOPs, Help with drafting responses to the audit reports, Implementing corrective and preventive actions in response to audit findings.

Why Outsource Activities?• Concentration on core business areas

Non-analytical operations such as Data reporting & validation, Drafting & revising SOPs, and taking care of other quality control documentation etc consume lot of time of the laboratory staff. Yet all of them are essential part the company's daily activities. By outsourcing operations of this nature, businesses can concentrate on their core competencies while their back office operations are being smoothly managed by a well qualified third party company.

• Cost Effective

Outsourcing gives a company the ability to get access to skilled and trained manpower at relatively very

low costs. The company doesn't need to go through the complicated process of firing employees during slow periods .

• Increased productivity

Differences in the time zones results in more number of working hours per day without the need for an over time pay. This can be used to a greater advantage in increasing the productivity which subsequently results in quick turn-around-times.

• Beat competition

In today's fast paced global economy a company needs to provide high-quality services to its customers in order to retain them at a lesser cost. Outsourcing in this case can help the company maintain lower costs without compromising on the quality of services, thereby giving them a better market position and even a competitive advantage.

• Third-party validation

Since the quality control aspects of the analytical data is validated by an independent company, end-users of the data will have more confidence in the analytical results as opposed to the data validated by the analytical lab itself.

   Services on Offer

 

• Data Reporting and Validation

• Reviewing Reports

• Sample Login

• Method Validation

• Handling QC documentation viz. MDLs, IDOCs, Training records etc

• Draft and Revise SOPs, Bench sheets

• Help with drafting responses to the auditing agencies

• Implementing corrective and preventive actions in response to audit findings

• Ordering Supplies

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  Major Lab Instruments

  

• GC-MS/MS-HS

• LC-MS/MS

• HPLC

• ICP-OES

• FTIR

• IC

• ELISA Analyser

• NIR

• UV-Spectrophotometer

• Tintometer

• Refractometer

• Viscometer

• Protein Analyser

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  Our Labs

Central Lab - HyderabadJodhpur SatLab Karnal SatLab

(Andhra Pradesh) Mr. Srinivas

Prathipati(Rajasthan) Mr. Gautam Vashistha

(Haryana) Mr. Rajendra

Kumar

D.No. 4-7-18/6B,2nd Floor,

Raghavendra Nagar,

Nacharam

Plot No. O/KA, Baggikhana Road, Panch Batti

Circle, Ratanada,

DSS - 151, Bansal Plaza, Mai

n Market Sector-7,

Hyderabad - 500 076 Jodhpur- 342001, Karnal - 132001,

Tel: 040-32939701 Tel: 0291 – 3252416 Tel: 0184 – 3200942

Mobile: 093477820508 Mobile: 09309407500 Mobile: 09315101586

commgrade@ncmsl.com commgrade@ncmsl.com commgrade@ncmsl.com

     

Kochi SatLab Unjha SatLab Gandhidham SatLab

(Kerala) Mr. Janee Basha (Gujarat) Mr. Ch. Ravi(Gujarat) Mr. Narendra

Limbachiya

1/34, Vazhaliparambil House,

Near UC college

Shiv Ganga Estate,Opp Gujcomasol, Unjha-

Mehsana Highway

Plot No.343, Sector 1-A, Near

Oslo Circle,

Aluva-II, 683 102 Unava, 384 170Gandhidham ,(Kutch) 370

201

Tel.: 0484 - 3277180 Tel: 02767-324727

Mobile: 09387881451 Mobile: 09347782508 Mobile: 09377582127

commgrade@ncmsl.com commgrade@ncmsl.com inspections@ncmsl.com

Sriganganagar SatLab Bikaner SatLab Indore Satlab

(North Rajasthan & South West

Punjab)

Mr. Rabindra Nanda

(South Rajasthan) Mr. Ravi Kumar(Madhya Pradesh) Mr.

Gautam Kumar Dey

Napal Nivas,8, Tilak Nagar,

Near Jindal, Hospital,

Opposite, FCI Godowns, Near Griha Vigyan

bal Madhyamik Vidyalaya, Indira Colony,

8-9, 3rd Floor, Dawa Bazaar,

13/14, R.N.T. Marg,

Sriganganagar, Rajasthan,

335001Bikaner, Rajasthan Indore - 452001

Tel: 0154 - 2478180 Tel: Tel: 0731-4245495

Mobile: 09314302150 Mobile: 09314310109 Mobile: 09302001185

commgrade@ncmsl.com commgrade@ncmsl.com commgrade@ncmsl.com

 Our Services     Market Intelligence & Consultancy Services 

Price, Crop & Weather Intelligence - Headed by Mr. Ganesh Ramamurthi

Trade & Commodity Intelligence - Headed by Dr. Hanish Kumar Sinha

 

 

We provide incisive market intelligence on the entire range of commodities traded in the country. Our pragmatic

solutions based on assessment of existing resources, identification of problems and critical evaluation of various

alternatives distinguish us from peers and other market players in the country. 

Our market intelligence division works with specialized teams in the following areas to provide client specific

solutions:

Price intelligence

We collect mandi level price, market information and determine the daily bench mark prices for commodities traded

on domestic commodity exchanges...more

Weather intelligence

We are actively engaged in setting up Automatic Weather Stations (AWS) across the length and breadth of the

country to provide weather intelligence to financial institutions for facilitating weather insurance products in the

country...more

Crop intelligence

We assess standing crop condition, acreage and forecast yields using simulation models, remote sensing and GIS

technologies...more

Commodity intelligence 

We provide commodity price perspective for short, medium and long-term periods by analyzing the complex market

dynamics in terms of fundamental, technical and econometric analysis...more

Trade intelligence

We undertake client specific risk management consultancy for effective management of the commodity supply

chains. We also provide handholding services for clientele in implementing the suggested solutions...more

We, an action-oriented risk-management company, provide a wide range of solutions for stakeholders in

commodities and our “Commodity & Trade Intelligence” team is offering the following services to empower our

clients deal with the price risk, information risk and physical commodity risks:

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  Price, Crop & Weather Intelligence Group (CWIG)Top of page

CWIG offers you record of weather data from the locations exactly where it is applicable, crop acreage and yield forecast for unparalleled competitive advantage of pro-actively planning your business well in advance! 

We help farmers, agriculture trading professionals and other stakeholders in the market with most comprehensive weather services available by a single point of access to weather data and crop status to mitigate risk and cultivate an edge in the market.

Price Intelligence

Crop Intelligence

Weather Intelligence

Our Team

Anatomy of a Weather Index / Weather Derivative

Our USP

Feedback

      

  Price Intelligence

CWIG gathers market pricing information for 24 important commodities from various National / International markets with the participation of around 600 leading participants. This data is used to monitor daily price variation, which is useful for commodity market and commodity lending banks.

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  Crop Intelligence

Information about the surface of the earth is vital to everybody. We all need to know what is happening around us, with our environment, with our infrastructure, with our forests and farmland, with our rivers and oceans. People want to be informed about their own region, about their country but also about the rest

of the world.  

A timely crop forecasting system is essential to strengthen any country’s food security. Periodic within-season estimates of crop acreage and yield and timely monitoring of crop health status could greatly help in organizing for the availability of inputs and for formulating optimal prices and strategies for marketing, procurement, transportation and storage. Being able to monitor fields on a larger scale and to accurately predict the yield for different crops will revolutionize the agricultural (precision farming), industrial (food industry) and trading (commodity markets) sectors. Creating and maintaining up-to-date maps of the world is currently impossible but will be achievable through our service.

We monitor crops in the country to provide accurate, timely and reliable information on the area of the major crops, their development and problems (focusing to drought assessment), plus reliable yield forecast and final yield estimates. These data is available at the country, state, district as well as at block levels. The crops area assessment is based on the multitemporal image analysis of various cloud free satellite data available. The crop yield forecast is through the application of simulation models which combines high-resolution satellite (IRS series and Landsat TM) data and time series data from MODIS and NOAA AVHRR. Vegetation indices and more precise indicators like canopy chlorophyll index, red shift, and thermal infrared-based crop water stress index, etc., are more promising for diagnosing the nutrient and water stress. These remotely sensed methods are now finding place in crop management through precision farming. Such an approach can aid sustainability by assisting the farmer in deciding the quantity of inputs to be applied to ensure food production and profits from agriculture as an enterprise, thus minimizing farmers’ input costs and reducing environmental degradation.

CWIG’s high-level products and services will consist of crop mapping, identification and monitoring as well as yield predictions. These products are based on multi-temporal image analysis, geographical databases and agro meteorological simulation models.

Crop Acreage

Crop area measurement is a very common practice in agriculture. Remote sensing is often used for this purpose because of its strengths in regard to spatial and temporal resolution, relative low costs and potential for rapid assessment of spatial features. Many of the same issues concerning crop type identification also affect crop area measurement from remotely sensed data. This is because crop type identification is a necessary first step to area estimation. In many cases, though, crop type identification is more concerned with classifying all crop types from each other, where area estimation often is concerned with only a few target crops. In either case, these two applications are frequently performed in sequence: first crop identification and then area estimation.

Crop Yield

Crop yield forecasts can greatly influence management decisions and provide a means for farm income assessment. Consequently, individual farmers and district-level administrators required rapid and accurate estimates of crop yield, both locally and regionally. In the past, the standard yield estimation procedure included the analysis of crop cuttings at randomly sampled ground plots during harvest or meteorological regression models using rainfall and past yield data. These methods often produce results that are neither not timely nor spatially explicit. Though still used, these methods are being replaced by estimation of crop yields using remote sensing because of its ability to produce results quickly and spatially. Using this technology, it was found that spatially meaningful estimates of yield can be made as early as 1 to 3 months prior to harvest, thus impacting management reaction time to yield forecasts.

Potential Yields of Wheat 

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  Weather Intelligence

CWIG is the country’s largest private weather data provider headquartered in Hyderabad. CWIG is the only country level weather content maker that employs over 80 staff with our presence in 16 states, including Andhra Pradesh, Bihar, Chhattisgarh, Gujarat, Haryana, Jharkhand, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and Uttarakhand. We offer a full range of weather content (viz., temperature (minimum, maximum and average), rainfall (amount and intensity), dew point, wind direction, wind speed (hourly average and high speed), relative humidity, atmospheric pressure, heat degree-day, cool degree-day, heat index etc.) with our "network of automatic weather stations" spread across the country. 

CWIG differentiates itself from other weather companies by utilizing all latest available technologies to provide better and accurate services to help our clients to take direct actions to mitigate their potential weather risk. As a full weather service group, CWIG is offering services to various industries such as agriculture, energy and disaster mitigation for corporate and government agencies that are subjected to weather risks. By taking advantage of our countrywide presence, CWIG can provide the highest quality services and support them in the most cost-effective manner.

Our commitment is to perform a variety of weather services to meet the varying needs of all stakeholders in the market and offering better services for each and every one of them is our final goal. 

Weather Information Management System (WIMS)One critical issue with all weather data is quality and reliability. Hence we have developed an extensive set of algorithms and procedures for processing the data to ensure better quality and reliability for various weather applications. Key attributes of “Weather Information Management System (WIMS)” are discussed below. 

Weather DataCorrect and accurate weather data is the lifeblood of the weather market.  For structuring and pricing weather insurance products or weather derivatives and for tracking positions during a season, traders, end-

users and portfolio risk managers require a) weather observations, typically for at least past 30 years and b) daily observations of current weather available at near real time. WIMS provide this full range of current weather data for a series of primary weather stations in almost in all states. CWIG can also provide data for clients who have specific data requirements.

Daily DataThe “real-time” data published by India Meteorological Department (IMD) regularly includes missing or erroneous values due to various reasons (viz., instrument errors, communication system failures, or other glitches) in the process of measuring, transmitting and recording weather conditions. Such values are almost always identified and corrected before publication of the final, official climate records anywhere from a week to several months later, however they pose a problem for data usage that depend on accurate and timely information. Incorrect data for recent periods can result in incorrect valuations of current positions, leading to erroneous insurance settlement or trading decisions.

To provide the market with more reliable data, we conduct overnight processing of prior-day data feeds from individual meteorological stations across the country. All data is run through a series of algorithms to detect missing or erroneous values, and experienced meteorologists verify and estimate a replacement value when a problematic observation is detected. Cleaned data is loaded into CITRIX server and delivered to clients on regular basis.

Historical DataEven though IMD has compiled extensive records of historical weather data over several decades or more, such data often is not suitable for underwrite an insurance product or the weather trading purposes in its raw form. To provide weather market participants with a more reliable basis for pricing and risk management, CWIG provide two types of services on historical data recorded from individual locations.

Cleaned Data Occasional missing values are common in most historical records, and CWIG also analyze the records to detect any erroneous data, such as minimum values that are greater than maximum or precipitation when there is no change in relative humidity, etc. All missing or erroneous values are replaced with simulated values or estimated values derived from comparisons with neighboring station recordings, analyses of local micro-climate biases and satellite cloud pictures. The final cleaned data provides a continuous and complete historical time series of daily values.

Enhanced Data Enhanced data is a version of daily historical values that has been adjusted to be consistent with how temperatures are being recorded by the current instrumentation at each individual weather station. Periodic changes in weather station location, instrumentation or environment over time have introduced measurement discontinuities – permanent increases or decreases in temperature observations – in the historical records for many stations. The existence of such discontinuities in historical data can make the data unreliable for underwriting insurance product or valuing weather derivatives that will be settled based on observations taken with current instrumentation.

Over the past 4 years, CWIG has developed and continued to refine a complex methodology for identifying and quantifying discontinuities in historical data. This data enhancement methodology involves an extensive series of statistical tests that compare historical temperature recordings at a particular weather station to recordings at a series of highly-correlated neighboring stations. Manual analyses and checks of the data by meteorologists serve as a final step to confirm the existence and magnitude of discontinuities in historical data. 

Data format and availability WIMS users have access to a broad array of weather data necessary for analyzing and tracking risk, including databases of cleaned weather data and automatic feeds of daily cleaned data for hundreds of weather stations countrywide in their desired format.

Highly Secure Security of client data has been treated as an issue of utmost priority in the design of the application. CWIG operates the system through CIRTIX server that provides extremely high physical security as well as high speed and reliable internet connectivity. The system itself incorporates features such as multiple firewalls and encryption of data transmissions to maximize security in all dimensions.

Spatial distribution of NCMSL Weather Stations Network.

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  Our Team

CWIG has been active in the weather risk market since 2005 and has a dedicated team focused on the development of overall weather risk management business. Located in New Delhi, Mumbai, Hyderabad and across various state capitals the team includes approximately 80 professionals with expertise in agriculture, meteorology, climatology, remote sensing, GIS, software development, electronics and instrumentation.

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  Anatomy of a Weather Index / Weather Derivative

Structure of index insurance contracts (taken from Weather index insurance for coping with risks in agricultural production by Ulrich Hess)

The terminology used to describe features of index insurance contracts resembles that used for futures and

options contracts rather than for other insurance contracts. Rather than referring to the point at which payments begin as a trigger, for example, index contracts typically refer to it as a strike. They also pay in increments called ticks. Consider a contract being written to protect against deficient cumulative rainfall during a cropping season. The writer of the contract may choose to make a fixed payment for every one millimeter of rainfall below the strike. If an individual purchases a contract where the strike is one hundred millimeters of rain and the limit is fifty millimeters, the amount of payment for each tick would be a function of how much liability is purchased. There are fifty ticks between the one hundred millimeter strike and fifty millimeter limit. Thus, if $50,000 of liability were purchased, the payment for each one millimeter below one hundred millimeters would be equal to $50,000/(100 – 50), or $1,000. Once the tick and the payment for each tick are known, the indemnity payments are easy to calculate. A realized rainfall of ninety millimeters, for example, results in ten payment ticks of $1,000 each, for an indemnity payment of $10,000. The figure below maps the payout structure for a hypothetical $50,000 rainfall contract with a strike of one hundred millimeters and a limit of fifty millimeters.

Payout Structure

How Weather-Based Index Based Insurance Works (taken from Risk Management: Pricing, Insurance, Guarantee. The Use of Price and Weather Risk Management Instruments presented by Erin Bryla)

Risk management products based on weather events avoid the problems of traditional crop insurance because they rely on objective observations of specific weather events that are outside the control of either farmers or insurance companies. They are also less costly to administer because they do not require individual contracts and on-field inspections and loss adjustments. Although these are often called weather-based index insurance products, they are strictly risk management tools rather than traditional insurance.

Weather-based index insurance compares a measurable, objective, correlated risk (e.g. rainfall, temperature, wind speed etc.) to yields. In the case of rainfall as the correlated risk, historical data gathered from regional weather stations is used to determine the mean rainfall for a given period in the farmer’s area. Once the appropriate period has been selected, the issue becomes structuring the rainfall index.

A weather (rainfall) “index” should be carefully designed to weight the more important periods for rainfall in the crop cycle more heavily and than those periods where rainfall is not as important to production. Precipitation in different stages contributes in different measures to plant growth and an excess of rain may be of no use for production. Hence, it is useful to develop a weighting system that allows to differentiate the importance of rainfall in different growth periods and to shape the model so as to take into account the fact that excess rain may be wasted without contributing to plant growth. The final value

of the index (the value which, when compared with the threshold, indicates if the insured should be granted an indemnity or not) is calculated by summing the values obtained by multiplying rainfall levels in each period by the specific weight assigned to the period.

Once a sufficient degree of correlation is established between rainfall and yield, and the index has been weighted properly an agricultural producer can hedge his production risk by purchasing a contract that pays in the case rainfall falls below a certain threshold. Farmers can elect coverage for a given period taking into consideration the crop cycle and the marketing cycle. Using this historical index the program is designed, where the option premium is the cost of the coverage and the strike is the rainfall threshold below which indemnity is triggered. The insurance is set up on a proportional basis allowing farmers to choose their rainfall trigger level or threshold.

Customers participating receive a payment if the rainfall index level falls below the threshold. The higher the threshold set for the contract the better the coverage provided the trade off being the higher the threshold the higher the cost of the coverage. In essence a farmer can elect a lower trigger amount of rainfall in order to lower his premium or he can elect a much higher trigger that will give him greater protection but will cost more in premium. Customers can also elect the comprehension of their insurance so they can partially or fully insure their revenue.

Their payment from the insurance is ultimately determined by the combination of these two factors - the rainfall threshold that they wish to be their trigger and the comprehensiveness of the coverage they want. Payment is equivalent to the percentage of rainfall-index shortage multiplied by the level of coverage selected. In the case where rainfall does not fall below the trigger no payment is made to the farmer and the premium is not returned.

Small farmer payout structure (Source: Innovative Financial Services for Rural India by Ulrich Hess). 

 

Anatomy of Weather Derivatives

Basic concept (taken from Weather Derivatives and Weather Insurance: Concept, Application, and Analysis by Lixin Zeng)

A weather derivative is a contract between two parties that stipulates how payment will be exchanged

between the parties depending on certain meteorological conditions during the contract period. There are three commonly used forms of weather derivatives: call, put, and swap.

A call contract involves a buyer and a seller. They first agree on a contract period and a weather index that serves as the basis of the contract (denoted W). For example, W can be the total precipitation during the contract period. At the beginning of the contract, the seller receives a premium from the buyer. In return, at the end of the contract, if W is greater than a pre-negotiated threshold S, the seller will pay the buyer an amount equal to P = k(W - S), where k is a pre-agreed-upon constant factor that determines the amount of payment per unit of weather index. The threshold S and factor k are known as the “strike” and “tick” of the contract, respectively. The payment can sometimes be structured as “binary”: a fixed amount P0 will be paid if W is greater than S or no payment will be made otherwise.

A put is the same as a call except that the seller pays the buyers when W is less than S. The payment, P, is equal to k(S - W) or P0 for a linear or binary payment scheme, respectively. The payment diagrams for a linear call and put contract are illustrated in the figure given below. A call or put is essentially equivalent to an insurance policy: the buyer pays a premium and, in return, receives a commitment of compensation if a predefined condition is met. A swap contract between parties A and B requires no up-front premium and, at the conclusion of the contract, party A makes a payment in the amount of P = k(W- S) to B. In the case of a negative P, the payment is actually made by B to A. In fact, a swap is a combination of (i) a call sold to B by A and (ii) a put sold to A by B. The strike S is selected such that the call and put command the same premium. Thus, this study will focus on the analysis of call and put contracts only.

The payment diagrams of a call and put contract.

A generic weather derivative contract can be formulated by specifying the following seven parameters:

• contract type (call or put), • contract period, • an official weather station from which the meteorological record is obtained,• definition of weather index (W) underlying the contract,• strike (S),• tick (k) or constant payment (PO) for a linear or binary payment scheme, and

• premium.

The parameters above determine the amount of payment (P) that the seller is obliged to make to the buyer. For a linear payment scheme,

Pput = kmax (S - W, 0) and

Pcall = kmax (W - S, 0),                                             (1)

where the function max(x, y) returns the greater of values x or y. For a binary payment scheme,

Pput = P0 if W - S < 0; Pput = 0 if W - S ≥ 0 and

Pcall = P0 if W - S > 0; Pcall = 0 if W - S ≤ 0.               (2)

Applications

Because the choice of W is extremely flexible, weather derivatives can be structured to meet a wide variety of risk management needs. The best-known examples are related to the consumption of electricity that is significantly affected by the seasonal temperature variations. An abnormally cool summer or warm winter decreases not only the number of kilowatt hours (KWHs) consumed but also the price per KWH in the unregulated energy trading market, reducing the revenue of utility companies that sell electricity. The same risk also applies to buyers of electricity, because an abnormally cold winter or hot summer can cause both the unit price and the consumption to rise. To manage these risks, derivative contracts based on seasonal accumulated heating degree days (HDD) and accumulated cooling degree days (CDD) are frequently used. HDD and CDD are defined as

HDD =   CDD =where N is the number of days over the contract period and Ti is the arithmetic average of the observed daily maximum and minimum temperatures on the ith day of the contract. HDD and CDD measure the respective need for heating and cooling in order for people to stay comfortable. For example, a utility company can protect itself against revenue shortfalls due to a possible warm winter by buying an HDD put with a linear payment scheme [Eq. (1)]. The contract parameters are usually determined based on the company’s experience of the relationship between the revenue fluctuations and HDD variations. On the other hand, a major user of electricity may buy an HDD call to prepare for the high utility cost due to a winter colder than normal.

Besides the widely used HDD and CDD call and put contracts, there is a growing number of new and innovative uses of weather derivatives. In the following example, a snow blower retailer, in order to generate sales, promised its customers a sizable rebate if the total snowfall for the coming winter were less than a threshold. Consequently, the company would face a substantial liability if the snow level were below the threshold. The company, however, could completely transfer the risk by buying a total snowfall put with a strike equal to the threshold in the rebate contract.

In this case, a binary payment scheme [Eq. (2)] would serve the purpose better than a linear one does

because the rebate would be triggered in a binary fashion.

The sellers of weather derivatives usually include major energy companies, who use these products to hedge their own risks and make trading profits. Insurance and reinsurance companies are also becoming important sellers, as they look for alternative ways to deploy their capital. Although the relatively short history of the weather derivative market does not allow a thorough analysis of the correlation between the performance of the weather derivatives and the general financial market, it is widely perceived that the correlation is negligible. Thus, they are appealing to a wide array of investors. 

NCDEX: Trading of a Weather Index, an example

Suppose we consider a small rice farmer Acreage: 1.5 hectares of land Yield of crop: 2000 kg/ha Output produced (yield * acreage)= 3 tones (valued at Rs. 33,000/-)

Farmer hedges his risk against bad monsoon Farmer buys a weather index option

o Notional value of Rs. 10,000/-o Premium priced at 3%

Farmer buys a put option on August 15, paying a premium of Rs. 300/- at an index level of 1265 Multiplier (for every unit shortfall in the index) will be Rs. 8/- (viz. contract value / index value) On expiry of the contract on September 20, the index drops to 1206 due to shortfall in rain Farmer exercises his option and gets paid Rs. 472/- and makes a gain of Rs. 172/-

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  Trade Intelligence & Commodity IntelligenceTop of page

   Services & Markets Covered

Our USP

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  Services & Markets Covered

We, an action-oriented risk-management company, provide a wide range of solutions for stakeholders in

commodities and our “Commodity & Trade Intelligence” team is offering the following services to empower our

clients deal with the price risk, information risk and physical commodity risks:

• Drawing up the risk profile of the client entity in the commodity sector and suggest appropriate solutions to

optimize the supply-chain values.

• Setting up of internal risk management guidelines, including a board driven policy and necessary operational

guidelines.

• Daily technical and fundamental analysis on each commodity of relevance to the client, together with the

procurement and/or trade strategy for the day on the commodity exchange, domestic or international.

• Track the prices of the relevant commodities in different cash and derivative markets across the world.

• Hand-holding to implement appropriate procurement and hedging/trading strategies.

• Obtaining necessary regulatory approvals for the hedge programmes and filing of reports and forms with the

regulators.

• Executing the hedging/trading and procurement tasks on behalf of the client to   effectively deal with the

complexities of trading in different time-zones, through different institutional brokers/ FCMs at various exchanges

across the globe.

      

Our Key Strengths

• Presence of strong in-house action oriented research team with domain knowledge on commodities, trading and 

various risk management strategies.

• Facilitating the client operations strictly within the set operational framework of hedging , besides assisting client

in laying down criterion for :

             - Deciding the right exchange and hedge instrument viz. future (and/or) options

             - Deciding the optimal hedge ratio and thus optimal hedge quantity to be hedged on exchanges

             - Deciding target price for hedging by linking it with the purchase prices of the commodity in the underlying

physical                 markets

             - Deciding the entry / exit strategies from cash & futures markets

             - Stop-loss and downward adjustments to ensure purchase prices within the target price range

Markets Covered

• Global & Domestic commodity exchanges for hedging commodity risks

• Global OTC markets for hedging freight and currency risksTOP