NCDEX to launch forward trade in seven commodities from Feb 2

NCDEX today said it plans to launch forward contracts in seven additional commodities, including some pulses, at fixed price from February 2.
"We have got approval from the regulator for launching seven forward contracts at fixed price early this month. We will launch the forward contracts of urad, tur, yellow peas, yellow soyabean meal (domestic), pepper, RBD palmolein and bajra from February 2," NCDEX Managing Director and CEO Samir Shah told reporters here at a conference on 'Agri Supply Chain 2015' organised by the CII.
Currently NCDEX has 19 forward contracts in a combination of fixed as well as reference prices. It launched trading in forward contracts last September.

A forward contract is an agreement between two parties to buy or sell an asset or a commodity of specified quantity and quality at a future date on a mutually agreed delivery price. It is different from a spot contract or a futures contract.
"Warehouse financing is a crucial enabler in the holistic development of the agricultural markets in India and there is a perceived trust deficit that the banks have as far as the sector goes," Shah said on this occasion.
Electronic registry, which provides transparency and tracking of commodities in every single warehouse in the country, will go a long way in giving comfort to the banks and can be the single biggest game-changer for the industry, he said.

"This is in line with the development in the Indian capital market, which has witnessed several initiatives that have helped in bringing transparency to the trade and building confidence among the participants," he added.