FMC removes extra margin of 5% on castor seed contracts

Commodity markets regulator FMC today said it has removed an extra margin of five per cent on all futures contracts of castor seed effective today.
With this development, the total margin -- which is a deposit amount that is required to be given by traders before entering into a pact to buy or sell the commodity at future date -- has come down on castor seed contracts.
Extra margin was imposed in November 2014 to check speculative trade. On February 11, commodity bourses NCDEX, on whose platform castor seed is actively traded, had sought from FMC removal of this extra margin ahead of arrival of new crop.

In a circular, FMC said, "The Commission has agreed to the proposal to remove the existing additional margin of five per cent (non-cash) on both long and short side of castor seed contracts with effect from February 25, 2015."
To maintain uniformity in the applicability of additional margins at national exchanges, the same may be made applicable across all exchanges having castor seed contracts, it said.
At NCDEX, the margin on castor seed contracts has come down to 7.03 per cent after the removal of extra margin.
Castor seed prices have come down to Rs 3,600 per quintal now from Rs 5,000 per quintal in November last year, an analyst said.