NCDEX to launch jeera mini futures of 1 tn next week, says official
Informist, Tuesday, Dec 12, 2023
By Afra Abubacker and Sayantan Sarkar
MUMBAI – The National Commodity and Derivatives Exchange is set to launch a mini futures contract for jeera next week, said Kapil Dev, chief business officer of the exchange.
"We are likely to launch jeera mini contracts next week to encourage more participation from traders and farmer producer organisations," Dev told Informist. The jeera mini futures would be of 1 tn each, against the current 3 tn, he said.
EXCLUSIVE
The mini futures, he said, would initially be launched for three months--January, March and April.
Jeera is grown only during the rabi season, and Gujarat and Rajasthan together account for nearly 99% of the country's overall output.
Since the beginning of the year, jeera futures have rallied more than 100%, with prices hitting a record high of 65,900 rupees per 100 kg on the NCDEX in September due to lower production and high export demand. However, prices have dropped since then to around 36,000 rupees per 100 kg, as sowing improved, said Ajay Kedia, director of Kedia Advisory.
The price fluctuations in jeera have led to volatility, and margins imposed by the exchange have cumulated to 30-33%, analysts said.
"Total margins in jeera contracts have cumulated to as high as 33% or 360,000 rupees per contract, and that has driven away small-scale traders and millers from the futures market," said Ravi Shankar Pandey, senior analyst at SMC Global Securities. The launch of mini jeera contracts would boost participation and trade volumes on NCDEX, he said.
High volatility and margins have made jeera futures expensive for many spice millers and blending companies, Kedia said.
At the time of writing this report, the most-active January contract was at 36,195 rupees per 100 kg, down 1.2% from the previous close. End
