The country’s leading agri commodity bourse NCDEX has denied any delivery defaults on its exchange as alleged by traders and exporters of jeera.
“This (delivery default) is completely a baseless statement. We do not have any cases of defaults as all contracts are settled as per the contract terms, and every participant fully understands these terms,” NCDEX Chief Business Officer Unupom Kausik said.
He said the futures trading is a price discovery and risk hedging platform and not a delivery platform, even for compulsory delivery contracts.
The delivery of jeera on NCDEX counter has come down drastically to 30 tonnes in May 2008 from 2,976 tonnes in June, last year. Since there was no August contract, the last delivery was in July with 234 tonnes of jeera recorded on the exchange.
While experts attributed the fall in deliveries on the exchange to slashing of penalty to 2.5 per cent, the exchange officials said they have sufficient safeguard against default as per the rules laid down by the market regulator Forward Markets Commission (FMC).
“We have adequate penalties as prescribed by FMC for seller default,” Kausik said, adding that all liquid contracts are running successfully with the present penalty structure.
Before FMC reduced the penalty to 2.5 per cent, the defaulters were paying as high as 8 per cent till October 2007.
Meanwhile, FMC has ruled out increasing penalty for the delivery default as demanded by jeera traders and exporters.
