The National Commodity and Derivatives Exchange (NCDEX) is witnessing steady spurt in non-agri commodity futures trading since the last one month.
According to the exchange data, in non-agri commodities, futures trading has gone up in crude oil (light sweet crude contract), copper (copper cathode) and steel substantially. Not only that, the exchange is also examining contracts in petrochemical products such as polypropylene, polyethylene and polyvinyl chloride (PVC), official sources said.
The exchange has been a leader in agri commodity trading contributing to around 90 per cent of the total market turnover. “It has been a strategic move by the exchange to step up its presence in non-agri commodities which derive prices from international market, now that NCEDX is firmly settled in agri business. Towards this, members of the exchange are encouraged to trade on the exchange in non-agri contracts now that these commodities, itself, are witnessing a lot of activities fundamentally. We have already built up significant volume in steel . The exchange, thus, is now examining contracts in the entire gamut of the segment,” said Vijay Kumar, chief business officer, NCDEX.
It could be mentioned that oil companies earlier under the aegis of ministry of petroleum had represented for trading of futures contract in petrochemical products . Even when the proposal was discussed with the commodity market regulator Forward Markets Commission, the idea could not fructify due to lack of active domestic market. However in the recent past, petrochemical market has grown manifold with every oil company setting up downstream facilities. The demand has also grown to the extent that many domestic buyers procure through imports.
“For better price discovery, exchanges can help by starting contracts in polymers,” said a oil company official.
NCDEX has already started giving quotes in the spot market for PE, PP and PVC. Prices of all products are derived from global markets.
Crude futures started gaining in volumes since September 2010 when futures contract trade zoomed from an usual volume of Rs 1,701 -Rs 2,000 lakh to Rs 19,659. The volumes are currently hovering around Rs 75,000-76,000 lakh . For November contract, the open interest in the commodity has gone up since September from 12,800 (Rs 1,407 lakh) to 421,300 (Rs 73,550 lakh) .
Similarly, in copper, volume of traded contracts which started picking up since last week, has gone up from Rs 259 lakh to Rs 3,857 lakh for November contract.