NMCE to launch Erode turmeric on June 8

The Ahmedabad-based National Multi-Commodity Exchange (NMCE) is all set to launch futures trading in turmeric of the 'Erode' variety on June 8.

The exchange obtained the regulator's approval last week to introduce turmeric futures initially in four series for their expiry in August, September, October and November. The contracts for each new month would open on the 10th of the month or previous day in case 10th is a non-trading day.

Traders would be permitted to square off their position between 17th and 20th of the delivery month as the contracts expire on 20th. No fresh positions will be allowed during these days. And, if the 20th of the delivery month happens to be holiday, delivery will be due on the previous day.

The exchange is hoping that the Erode variety will repeat the performance of the Nizamabad-origin turmeric, which contributes Rs 4254 crore every month to the National Commodity and Derivatives Exchange (NCDEX).

Of late, turmeric has witnessed a huge volume surge with each passing contract on NCDEX. In fact, the Erode-origin turmeric launch is the consequence of traders' repeated demand as the region contributes about 17 per cent of India's total turmeric production of 51 lakh bags (75 kg each).

The exchange has fixed a trading and delivery of 10 tonnes, while the quotation would be based on per quintal basis ex-Central Warehousing Corporation (CWC) Erode inclusive of the value added tax (VAT).

The daily price limit will be 4 per cent, which might be extended by 2 per cent on either side in case it hits the existing limit, but no trade would be permitted beyond 6 per cent on either side of the previous day's closing price.

The compulsory delivery contract would ensure the limit at 3000 tonnes and 9000 tonnes for clients and members respectively.

The regulator enumerated strict quality specifications for the delivery of turmeric, which should be farmer polished turmeric fingers. At least 75 per cent of the fingers should be 3 cm or above, should be free from infestation, fungus and any artificially coloured dyes or chemicals. The maximum permissible limit for moisture is 12 per cent, bulbs 3.0 per cent, broken fingers 3.0 per cent, inferior quality turmeric 1.5 per cent, while dirt, earth and stones should not exceed 0.75 per cent of the total quantity.

Damage due to moisture (lokhandi) or over-boiling (kadh) should not exceed 1.2 per cent and that due to un-boiled or less-boiled should not be above 0.3 per cent.