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National Commodity & Derivatives Exchange (NCDEX), India's second-largest commodity futures trading platform, is set to sign a trading pact with multinational grain trading companies and corporate houses for its ensuing forward contracts in agricultural commodities.
Samir Shah, managing director and chief executive officer, said, "Talks are in advanced stage. We are hopeful the agreements will be signed with large corporate consumers and multinational grain trading companies in two-three weeks."
NCDEX has decided to introduce forward contracts in maize and sugar by the end of August. This would be extended to other commodities.
"Depending on the success of these contracts, we will expand forward trading in other agri commodities. We are looking at forward trading in horticulture products as well," said Shah.
According to an estimate, commodities worth Rs 9,00,000 crore are traded every day in the spot market, of which sizeable deals happen on a forward basis. Emphasising on the potential of forward trades, Shah said, "We are extremely bullish towards this segment of trade, untouched between spot and futures. Through forward trade, we have just tried to capture the untouched area to complete the trading chain." Most of large companies in the agriculture sector have been hedging their commodities’ risks on NCDEX. According to Shah, lots of middlemen and commodity brokers have shown interest in taking membership in the forward segment.
