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NCDEX slashes transaction fee in sugar futures

Aims to attract traders after govt removes stockholding limit

Dilip Kumar Jha  |  Mumbai 


The agri-centric commodity futures trading platform, National Commodity and Derivatives Exchange (NCDEX), has reduced transaction charges sharply to attract volumes in contracts following the removal of limit on Tuesday. Effective December 21, would be charging Rs 0.10 for every Rs 1,00,000 of turnover. Earlier, it was Rs 4. Apart from that, the exchange has exempted risk management fee of Rs 4 for every Rs 1,00,000 of trade in contracts. So, would charge only Rs 0.10 from Rs 8 earlier for every Rs 1,00,000 of trade. The sharp decline in transaction charges is expected to drive traders and stockists towards futures trade, given that around 1.5 million tonnes of fresh purchases are expected.

The government removed limit of 1,000 tonnes on traders in the Northeast and of 500 tonnes on traders across the rest of the country. “Removal of stock limits enables the move to a more market-based price discovery process for The contract has traditionally served the industry well and we look forward to rebuilding participation to facilitate an orderly price discovery process,” said Samir Shah, MD & CEO, Removal of the stock limit will ensure additional buying, supplemented by robust production and smooth supplies. This will lead to better market sentiments. Large co-operatives and millers will now be able to fetch sizeable stocks from the market, thereby activating the impending purchase cycle that had witnessed a dry spell in the past three months This decision of the government also empowers farmers to take production and post-harvest marketing decisions by looking at the futures price. Approximately, 50 million sugarcane farmers and approximately 0.5 million mill workers are directly dependent on the sector for their livelihood. During season 2017-18, crushing operations in all major producing states had started smoothly. Total production was estimated to be around 24.9 million tonnes by the end of the season, against estimated consumption requirement of about 25 million tonnes. However, with the carryover stock, the availability of was sufficient to meet estimated domestic requirement. As such, there will be smooth availability of and the prices in the domestic market are expected to remain stable at reasonable levels. The had recorded a thin volume in futures with around 30 tonnes as open interest for all running contracts as of December 20, 2017.

First Published: Thu, December 21 2017. 01:25 IST