Riding on the new-found interest in commodity trade, two ex-journalists have launched a portal providing information on commodities.
Commodity Online India Ltd will boost increased coverage of cotton, wheat, sugar, bullion and rubber. The promoters of the site also plan to launch a magazine.
“India is the largest producer and consumer of the largest varieties of commodities in the world,” said Commodity Online managing director George Iype. “There is huge potential for online-offline media initiatives in this sector. Our media venture (www.commodityonline.com) fits in well because there is a severe shortage of credible and in-depth content on commodities.”
Commodity Online says it will differentiate itself from competitors, such as www.agriwatch.com and www.commoditycontrol.com, by providing a wider range of news and offering much of it to the public at no cost.
The portal provides free news about commodities, the futures market pulse, technical analysis, tips to traders and research reports tailor-made for commodity trade. But, like its competitors, it is also providing premium, fee-based research reports to a few brokerage firms that do not have a research wing.
R. Raghuram of agriwatch.com says globally commodities trade is growing and India with its huge potential in the commodities sector is toeing the global line. The site has been providing basic information for those interested in commodities, including some global analysis. Because the portal had a policy of not having any trade links, the promoters decided to go for a paid-content site, adds Raghuram.
A free site does not pose a threat to it as what matters is the information provided and for that clients are willing to pay, he adds.
At the latest entrant, coverage of rubber will be launched in a month and that of other commodities within six months. These verticals will provide additional information on daily price movements from across the globe, world production and demand situation and expert opinion on the commodity, including advice to growers and traders. A print magazine will hit the stands by the end of this month and will be called Commodity Market, said Iype.
Commodity futures trading, which started in a big way in the country four years ago, has now grown manifold. The interest in this sector can be gauged by the daily trade volumes touching the Rs12,000-crore level.
According to statistics available from regulator Forward Markets Commission the total value of the trade in the commodity futures market during fiscal 2006-07 was Rs36.76 lakh crore.
Poonam Gupta, vice-president of the National Multi-Commodity Exchange, says that those who provide information on the Internet about the commodity sector have a major role to play, given the growing interest in commodities. “There has to be national and international analysis of the commodities,” she says of the portals.
Iype and journalist friend Binu Alex, both of whom gave up their journalism jobs, have invested Rs2 crore in the portal that started in January. Savings and funds from friends provided the bulk of the investment.
“Already, we have four investment proposals from venture capital funds and global commodities players, which we are assessing and discussing,” claims Iype.
Iype launched the Internet start-up after working 10 years in the portal rediff.com as managing editor. He roped in Alex who was working as the India correspondent of a US-based news radio station.
Commodity Online’s corporate offices are in Ahmedabad from where Alex manages the editorial operations while Iype operates primarily out of Kochi and Delhi. “We decided to set up the corporate office in Ahmedabad because Gujarat is the epicentre of commodities trade,” Alex said.
Commodity Online also powers the commodities section in rediff.com. It has tied up with India’s leading commodity brokers for online trading in commodity futures. It sends e-newsletters to 30,000 commodity players daily, including banks and financial institutions. Iype says the portal is also in the process of tying up with Tickerplant Infovending Ltd, the financial data services company launched by Financial Technologies Ltd, which is also a promoter of the Multi Commodity Exchange. Tickerplant aims to sell real-time feeds of 100 market segments from across the globe.
Commodity Online currently has 35 employees and uses data servers at a Reliance Communications data centre in Mumbai to host its portal.
“There are thousands of companies in India doing one business or the other in commodities,” Iype said. He hopes that advertisements from such companies will help Commodity Online break even within a year.
Commodity Online has also started an online trading channel where commodity brokers are listing their own online trading platforms for a yearly fee that Iype didn’t want to disclose.