|
| Exchanges to re-launch wheat futures today |
| Dilip Kumar Jha / Mumbai May 21, 2009, 00:44 IST |
|
The country’s two largest commodity futures trading platforms, the Multi Commodity Exchange (MCX) and the National Commodity & Derivatives Exchange (NCDEX), are launching six monthly wheat futures contracts from tomorrow. The third, the National Multi Commodity Exchange (NMCE), is planning to introduce contracts of this most sensitive commodity next week.
The development assumes significance as the commodity will be available to hedgers and speculators for a fair price discovery after two years. Commodity brokers are jubilant with the launch, which they feel will help raise the daily turnover at the NCDEX that was falling dramatically.
The commodity was banned from trading in February 2007 on demand from the Left parties, the then allies of the Congress-led United Progressive Alliance (UPA) government, to check inflation. The commodity has 1.38 per cent weight in the wholesale price index. Wheat was one of the most active commodities on the NCDEX at the time of the suspension.
The three national commodity exchanges have already got mandatory approval from the regulator, the Forward Markets Commission (FMC).
Confirming the launch, Joseph Massey, MD and CEO of MCX, said the exchange would launch six compulsory delivery contracts to begin with. Delivery centres have been restricted up to the radius of 50 km from the municipal limits.
An NCDEX official said the contracts would entail trading units of 10 tonnes and tick size of 20 paise. Contracts would be deliverable from warehouses based in New Delhi, Ahmedabad, Bareilly, Indore, Itarsi, Kanpur, Sirsa and a couple of other centres in Gujarat and Madhya Pradesh.
“We are not in a hurry. We will launch wheat contracts with the old contract specifications,” said Anil Mishra, CEO of Ahmedabad-based NMCE.
The government lifted the over two-year-old ban on wheat futures last week, allowing exchanges to apply fresh for approval.
“The launch is a positive step that will revive trading sentiment in the agri-commodity basket. But the commodity will take some time to reach the daily average turnover of Rs 1,500 crore, the level at which it was suspended from trading,” said Naveen Mathur, associate director, Commodities & Currencies.
India’s food ministry has forecast 2009 wheat output at 77.78 million tonnes as compared with 78.57 million tonnes in 2008 and 78.4 million tonnes in 2007. However, the country continues to retain the export ban, which analysts believe will be lifted soon.
Despite India being in a comfortable position with a buffer stock of about 23 million tonnes, the fear of suspension of the commodity from the futures platform would continue to dog the market participants, Mathur said.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
