FMC steps to curb volatility in castor seed, coriander pay-off

After its intervention to check volatility in prices of castor seed and coriander contracts at NCDEX, commodity market regulator FMC today said the delivery rose sharply and open interest fell, while asserting that any manipulation attempt in future market would not be tolerated.
The Commission said it had observed abnormal volatility in prices and buildup of open interest in castor seed and coriander traded at commodity exchange NCDEX platforms.
It had directed the exchange to advance the staggered delivery and impose pre-expiry margins on these commodities.
"As a result of the above directions, castor seeds stock which was 2.05 lakh tonnes as on December 19, 2014 increased to 4.3 lakh tonnes (valued at about Rs 2100 crore) as on January 19, 2015 which is the highest ever stock deposited at the exchange accredited warehouse," FMC said in a statement.

The open interest of January 2015 contract reduced to 0.36 lakh tonnes from 3.46 lakh tonnes during the period under review, it added.
"A delivery of 2.03 lakh tonnes (valued at Rs 947.95 crore) was executed in Castor seed January contract at NCDEX. This is the highest ever recorded delivery executed in any agriculture commodity on the exchange platform in terms of both quantity and value," the regulator said.

Similarly, it said that coraiander stocks increased while the open interest reduced during the period under review.
"A delivery of 8230 tonnes (valued at Rs 94.98 crore) was executed in coriander January contract at NCDEX. This is the highest ever recorded delivery executed in coriander at the exchange platform in terms of quantity and value," FMC said.

The regulator noted that its "pro-active intervention" to prevent any market manipulation in these commodities is a strong message that "any attempt at manipulation in the commodity futures market will not be tolerated".