NMCE modifies castor seed contract

Ahmedabad-based National Multi-Commodity Exchange (NMCE) has modified the norms for castor seed trade with immediate effect. The exchange has received the go ahead from the Forward Markets Commission (FMC), the commodity market regulator.

As per the modifications to the existing contract, the moisture content of castor seed has been reduced from 7 per cent to 5 per cent and the maximum limit of the total combined refraction has been fixed at 5 per cent from the earlier 11 per cent.

Castor seed contract, which remained inactive on the NMCE for about six months, was reactivated in the first week of January 2008. Out of the total production of 9 lakh tonnes, Gujarat produces about 70 per cent, with NMCE witnessing a trade of about 500-600 tonnes daily. The exchange is expecting the daily volume to go up to 2000 tonnes.

Castor seed is traded online at the exchange in lots of 10 tonnes (MT) and the price is quoted in rupees per quintal (100 kg). The open position limit for members is 15,000 mt and that for clients is 5,000 mt.

NMCE has also modified the number of futures contracts. Instead of the earlier maximum of '12 monthly contracts', there could now be a maximum of 'six bi-monthly' contracts, running concurrently during a year.

The exchange has also added eleven new delivery centres for the commodity for members and clients hailing from Gujarat, which account for over two-thirds of the country's total production of castor seed, followed by Andhra Pradesh and Rajasthan.

Also, if the seller-member tenders warehouse receipts (WR) to the exchange clearing house from the 10th to the 15th day of the delivery month, they will be allocated the same on FIFO (First-In, First-Out) basis at the closing price of the previous day.