Castorseed Futures To Open Across 4 Markets Today
Trading in the futures markets in castorseed across four markets -- Mumbai, Rajkot, Ahmedabad and Bhabhar - commences today through the December contract.
According to marketmen, volatility at the markets is expected to be high and the regulator of the Forward Markets Commission (FMC) has, in view of this, revised the special deposit structure to be paid by brokers based on the settlement price and their individual positions.
The FMC has kept the margin structure the same, but the deposit rates have been revised upwards by five per cent.
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"The benchmark will be higher....and while the price volatility factor remains, we feel the markets are safe as the necessary safety norms have been put in place,'' Forward Markets Commission chairman V K Aggarwal said.
The last price struck at the Mumbai market in the September 1998 contract for castorseed was Rs 1,722 per quintal, which is the all-time high level.
According to marketmen, the December contract is expected to open sharply higher than the closing of the previous contracts.
"The contract may open at around Rs 1,710. One cannot rule out a level of Rs 1,850 per quintal within a period of 25 trading days,'' a commodity futures broker told Business Standard.
According to the new deposit rate structure devised by the FMC, the member will pay a deposit amount at 25 per cent of the closing price of the first settlement (for members who wish to hold onto contracts beyond the particular price).
This deposit will be a flat rate which will be paid according to a specified number of contracts.
A second deposit will also have to be paid by members but this would be a fluctuating deposit. "While this is a stiff structure to be paid, this is the only way the exchange can maintain the liquidity at the markets,'' a source said.
According to marketmen, most oilseed varieties are expected to show volatility in the coming weeks which would reduce only if the government move in for groundnut oil imports in a major way from the US markets, sources said.
While the Mumbai futures markets in castorseed is expected to record the highest prices in coming weeks, the Rajkot and Ahmedabad
markets will also show a similar trend, marketmen said.
"There are fresh players who are keen to come into the market even at these levels....further groundnut oil millers/crushers may take up positions in these markets to hedge their risks,'' a source added.