Ncdex to start barley futures

The National Commodity & Derivatives Exchange (Ncdex) is set to launch barley futures within a month. The Forward Markets Commission on Wednesday gave its approval to begin trading in barley on the commodity exchange.

"The first contract for March delivery would be available for trade within a short while from now, for which Jaipur, the hub of barley production in India, has been identified as the delivery centre," said Sanjeev Vohra, product manager, Ncdex.

The contract size has been fixed at 10 tonne with a tick size of 20 paise a quintal. Contracts can be quoted in quintals, he added.

The exchange has drafted strict quality specification for delivery with a moisture content of 10 per cent. For imported barley, a 2 per cent variation "� upward or downward "� in moisture content is permissible. The quality of about 40 grains per gram is permissible with a 2 per cent broken carnage. The exchange has not yet fixed margins for the barley contract.

Rajasthan, with a 31 per cent share of the country's total barley production of about 12 lakh tonne, ranks second only to Uttar Pradesh, which makes up about 38 per cent of the total barley production. Bihar, Haryana, Punjab and Madhya Pradesh are the other major barley-producing states.

There is immense potential for barley futures of creating a volume of more than 100 times the current size of Rs 1,200 crore. Till 2005, India was self-sufficient in barley production. But, the country imported barley from Australia, Spain, the Netherlands and Austria in 2005 after a gap of several years.

About 40 to 45 lakh tonne of barley is traded worldwide, which is largely used for cattlefeed and human consumption. Russia has the largest global market share of 13 per cent in barley production and trade.

The barley futures are available for trade only on the Winnipeg Commodities Exchange in Canada, which launched barley trading in the 19th century.