NCDEX plans agriculture index comeback with guar, spices derivatives

NCDEX is expected to revive its agricultural indices in the next two quarters, with guar and spice offerings planned as it prepares to expand into the equity market

Commodity exchange NCDEX, which is readying to grow in the equity segment, is gearing up to re-launch agricultural indices with plans to restart derivatives trading, according to sources.

 

The re-launch of its agri indices, discontinued since February 2022, is expected in the next two quarters, sources said.

 

Sources said the exchange is working to launch two indices on guar (Guardex) and spices (Spicedex).

 

The guar index would have constituents such as guar gum, seeds, and korma, while the spices index would comprise coriander, turmeric, and cumin.

 

However, the exchange’s plans for Agridex, its overall agri-index, is dependent on lifting ban on the derivatives of seven key agri commodities. These include non-basmati paddy, wheat, chana, moong, mustard seed and its derivatives such as mustard oil and cake, soyabean and its derivatives, and crude palm oil.

 

 

The review of the ban may happen next year as the Securities and Exchange Board of India (Sebi) had extended it in March 2026.

 

The exchange had first launched the agri-index in 2019 and made it operational in May 2020. However, following the ban of derivatives on seven agri commodities which still remains, the index had to be discontinued. The index used to track 10 commodities selected based on liquidity on the exchange platform.

 

Subsequently, the other two indices Guarex and Soydex, which were launched in August 2021, were also discontinued.

 

Sources added that in its overall diversification plans, the exchange may launch indices on guar and spices soon after gauging participation interest.

 

“As the indices will be cash-settled, unlike other agri-commodities which may have physical delivery, the participation is expected to be revived as the exchange already has end users in the ecosystem,” said a source familiar with the developments.

 

NCDEX declined to comment on the queries sent on email.

 

“An agri index could help broaden participation and deepen volumes on NCDEX. As the agri derivatives ecosystem evolves, greater awareness, participation and market adoption can support the development of a deeper and more vibrant market over time and support its market share growth,” said Sunil Katke, national head of commodities at Kotak Neo.

 

In its bid to further diversify its offerings, the exchange is targeting an entry into the equity cash segment by January next year, subject to final approval from Sebi.

 

The exchange, backed by top brokers such as Groww and Zerodha, plans to enter the cash segment first, followed by equity derivatives by July next year, subject to regulatory approvals.

 

NCDEX had raised ₹770 crore last year from brokers and investors, including Radhakishan Damani, Ramesh Damani, Madhusudan Kela and Sunil Singhania, to fund its expansion into new business segments.

 

Earlier this year, the exchange has also launched a mutual fund transaction platform called NCDEX Nidhi and weather derivatives.

 

“MCX’s commodity market today has a strong base of traders and investors, particularly on the options side, alongside value-chain participants who can benefit from the extended market hours. In comparison, an NCDEX agri index is likely to have a distinct participant mix, with greater participation from value-chain players and other agri stakeholders, alongside investors and traders,” Katke added.  

                                                               Plan of action

• Exchange may relaunch new agri indices within two quarters, sources said
• Guardex will track guar gum, guar seeds and korma commodities
• Spicedex will comprise coriander, turmeric and cumin
• Agridex revival depends on lifting derivatives restrictions on seven commodities
• Expansion part of the diversification plan for NCDEX, with equity segment foray by January next year