Volumes on NCDEX down 60% as policy risks keep away traders.
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Trade volumes and open interest (OI) in agro commodities such as food grains, pulses and sugar have been declining at major domestic commodity exchanges in the past two months. Market participants blame it on price-regulatory risk in trading in these commodities.
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Even though the government is taking efforts to control their prices, these commodities "� wheat and sugar, in particular "� still remain price-sensitive.
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Therefore, with market participants reluctant to take positions on account of the risk, the average daily volumes on the National Commodity and Derivatives Exchange (NCDEX) have plunged almost 60 per cent since June 2006, while on the Multi Commodities Exchange (MCX), the daily trading volumes have gone down to almost one third now of what was seen in June.
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The daily OI positions on the NCDEX too have dived from 9.25 lakh quintal daily in June to 6.13 lakh quintal in August to date. On the MCX, the OI positions have slumped by one-fourth from the daily average of 40,000 quintal to around 10,000 quintal till date.
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As for food grains, market participants are reluctant to take positions in wheat despite the spot prices being on the rise during the last two months.
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The daily volumes on the NCDEX have declined from Rs 100 crore in June to around Rs 75 crore now. OI too has fallen by almost one-third, from 4.76 lakh quintal in June to 2.64 lakh quintal till date.
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The total daily trading volumes in some pulses "� urad, tur, chana and masoor "� have fallen sharply from Rs 1,400 crore to Rs 900 crore, while OI in these commodities has declined from 3.20 lakh quintal to 2.50 lakh quintal.
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Sugar too has witnessed a downturn during the same period, with the trade volumes on the NCDEX having fallen drastically from Rs 40 crore to Rs 26 crore and the OI declining from 99,000 quintal to 73,000 quintal.
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Urad has seen a mixed trend during the two-month period with the daily volumes having increased from Rs 60 crore in June to Rs 100 crore till date.
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However, OI in the commodity has fallen from 2.90 lakh quintal to 2.65 lakh quintal. On the other hand, for chana, the daily turnover has had a sharp fall from Rs 137 crore in June to Rs 83 crore now, while its OI has declined from 3.02 lakh quintal to 2.26 lakh quintal.
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DOWN UNDER
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ON THE MCX, the daily trading volumes have gone down to almost one -third now of what was seen in June
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THE TOTAL daily trading volumes in some pulses have fallen from Rs 1,400 cr to Rs 900 cr
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SUGAR too has witnessed a downturn during the same period, with the trade volumes on the NCDEX having fallen from Rs 40 cr to Rs 26 cr |
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