NCDEX to introduce bellwether indices
The exchange is seeking to put in place a composite commodities index
| The indices are being envisaged on the lines of the benchmark Sensex and Nifty indices for equities. | |
| The Exchange is seeking to put in place a composite commodities index as well as separate indices for soft and hard commodities. | |
| NCDX wants the domestic prices of commodities to become reference point for global pricing. Currently, though India is a big-time producer of a host of commodities, including sugar, cotton, coffee, pepper, oil seeds, steel, and the biggest importer of gold in the world, India is unable to dictate prices in the global market place. | |
| "The indices, which are currently being constructed, could be introduced in six months," P H Ravi Kumar, managing director & CEO, NCDX, said. | |
| Underscoring the potential of commodities market in India, Kumar pointed out that lending by banks against agricultural commodities could be ramped up to Rs 2,50,000 crore a year as against Rs 7,000 crore now. | |
| According to Narendra Gupta, chief business officer, currently pricing in the global commodities market place is decided at Chicago, New York, London and Tokyo despite the fact that India is a leading producer as well as consumer of a host of commodities. | |
| "The demand-supply dynamics are such that global price discovery of some commodities should be taking place in India," he said. | |
| NCDX, on which 55 per cent of the daily turnover is accounted for by agriculture commodities and the balance by bullion, started its operations in January 2003 with a paid-up capital of Rs 30 crore. | |
| It's promoters are LIC, Nabard, NSE, ICICI Bank, Crisil, Iffco, PNB, and Canara Bank. The Exchange has a settlement guarantee fund of Rs 90 crore.
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