NCDEX hikes margin on chana to 50% to curb speculation

To curb speculation in pulses futures, agri-commodity bourse NCDEX will double the total deposit money, called margin, to 50% on chana (gram) traders starting Monday.

The margin is a minimum percentage of the money of the order value that traders are required to deposit with the exchange to trade in the commodity futures.

There is 25% margin on chana buyers as of now and 5% margin on sellers.

Following direction from the regulator SEBI, NCDEX in a circular said, "Trading and clearing members are informed that special margin of 25% on long side (buyers) will be imposed on chana with effect from November 9."

With this hike, total margin will be 50% on chana buyers. The November 2015, December 2015 and January 2016 expiry contracts are covered by the special margin.

That apart, NCDEX said both chana buyers and sellers will attract a daily 3% pre-expiry margin, applicable from 1st of the month till the contract expires.

Accordingly, chana buyers trading in the near-month November futures contract would attract total margin of more than 75% including pre-expiry margin, it added.

Chana futures prices have increased to the Rs 5,200 per quintal level at present from Rs 3,000 per quintal in the last year, on likely fall in kharif pulses output in the 2015-16 crop year (July-June) in the wake of deficit monsoon rains.

Chana is the only lentil traded on the futures market and the regulator is closely monitoring its price movement to curb any speculative trade.

Pulses prices, especially tur and urad, have gone through the roof ruling at around Rs 190 per kg in retail points due to domestic shortages.

The government, which is under pressure to check price rise in pulses, has taken several measures to boost domestic availability.