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      Agri Commodities Preview: NCDEX relaunches castor futures

      MoM Team / Mumbai, Jan 06, 2017 09:41 AM IST

        Agri Commodities Preview: NCDEX relaunches castor futures

        The National Commodity and Derivatives Exchange Ltd. (NCDEX), announced the commencement of trading in Castor seed futures. The Exchange has received approval from SEBI for re-launching of the contract after its suspension in January 2016.

        The castor seed futures contract serves a larger economic purpose. It is a crucial risk mitigation tool for the castor seed, oil and derivatives’ processors and exporters, who need to hedge their exposure to price risk. In the absence of futures contract, which is an effective risk mitigation tool, the traders/processors/exporters are left vulnerable to fluctuating prices.

        For the castor farmers, the Exchange not only provides a national price benchmark, but also an alternate market platform, thereby enabling the farmer to get fair price for his produce.

        Samir Shah, Managing Director and CEO, NCDEX, noted that the exchange has significantly strengthened risk management framework under the guidance of SEBI and we look forward to the successful re-launch of the castor seed contact.

        In the last six months, the Exchange focused on building a stronger framework for risk management and surveillance. NCDEX also had a hard look at its risk management practices and processes, and introduced concentration margins, penalties for late payments of member obligations, and a more fit-for-purpose initial margin structure for commodities based on liquidity.

        The benchmark futures for February closed around Rs 3,930 per quintal yesterday. March and April contracts ended at Rs 3,970 mark.


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      Source: Capital Market



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