NCDEX modifies RM seed futures contract

The National Commodities and Derivatives Exchange (NCDEX) today announced changes in its R M Seed (rape mustard seeds) futures contract.
The contract has been simplified by reducing acceptable grades of RM seed. The modified contract specifications will be applicable for contracts expiring April 2015 onwards and will be available for trade from October 1, NCDEX said in a statement here.
Now, there would be only 12 grades for premium/discount calculation instead of 224 grades earlier. This standardisation makes it easier for traders to deposit on the exchange platform and streamlines the delivery process for the buyers too, it said.
"The modified contract parameters of mustard will bring more transparency and clarity to market participants involved in physical delivery of mustard seed," NCDEX Managing Director and Chief Executive Officer Samir Shah said.

The Exchange has further simplified the premium discount calculations too. Recognising that moisture is largely governed by climatic conditions, it has done away with using moisture as a criteria for premium discount calculations.
Any upward deviation from the basis moisture will now only be adjusted in the weight and will have no bearing on the prices.
Further, now only RM seed having an oil content of 39 per cent and above will be accepted as against previous 37 per cent.
This will result in an improved quality of R M Seed being delivered on the Exchange platform and premium and discount will be calculated only on the basis of oil content, it added.