NCDEX plays down talks of piling up old stocks

The National Commodity and Derivatives Exchange (NCDEX) today dismissed as baseless market buzz that pulses stock at the exchange was of inferior quality.

Market is rife that stocks, especially of lemon tur and urad, at the Ncdex were not fit for delivery in September as it is Mayanmar's old crop (of 2004). Further, traders and analysts are saying that the exchange is unlikely to revalidate the stocks as it is old.

"Ncdex stocks are basically of Myanmar's 2004 crop (harvested in December-January) and of February-March shipment. The moisture level is now high and revalidation is likely to be refused," said a Mumbai-based pulses trader.

Exchange officials, however, refute the matter. "We have not allowed old crop after the delivery of April contract. Thus, the idea that old crop is being used for September delivery holds no truth," an official said.

"Further, revalidation of stocks will only start tomorrow (that is September 23). The delivery has a four-month validation in the form of 2+1+1. That is, the contract is first validated for 2 months and can be first and second extension for one month each. After four months, the member has to turnaround the stocks and again go in for assaying and quality testing."

"Though warehouses go for regular fumigation exercise, quality testing is mandatory to keep quality parameters," said Narendra Gupta, chief business officer, Ncdex.

Most Ncdex pulses contracts were weak today on poor sentiment. December tur contract hit a downward circuit amid concerns over arrival of new crop in November when the market is currently seen a healthy supply of imported produce.

According to a senior analyst with IL&FS Commodities, "Urad new crop arrivals have started and tur's will be in November. This has led to weak sentiment.

While the weakness in tur prices seems to have bottomed out at current levels and thus, a correction is likely now, he added. In case of urad prices, however, weakness will continue. "It can go down by another Rs 50 per 100 kg in the next 6-7 days."

At 1620 IST, Ncdex November lemon tur contract traded at Rs 1,574 per 100 kg after an intra-day low of Rs 1,560. December lemon tur contract traded at Rs 1,565 per 100 kg, after a low of Rs 1,562.

Ncdex November urad contract traded at Rs 1,735 per 100 kg after an intra-day low of Rs 1,740. December urad traded at Rs 1,777 per 100 kg after a low of Rs 1,763. Prices of most pulses, mainly urad and tur are volatile as India depends on imports to meet demand.

FEELING THE PULSE

Market is rife with rumours that lemon tur and urad stocks at Ncdex were not fit for delivery in September

Ncdex stocks are basically of Myanmar's 2004 crop (harvested in December-January) and shipped in February-March

Traders and analysts say the exchange was unlikely to revalidate the stocks as it is old

December tur contract hit a downward circuit amid concerns over arrival of new crop in November