The Hindu : Business : NCDEX to expand menu of products for trading

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Friday, Aug 29, 2008
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NCDEX to expand menu of products for trading

Special Correspondent

To set up a power exchange by October this year

It will introduce a warehouse management system
The one-way trade in pepper crossed Rs. 100 crore a day

KOCHI: National Commodity & Derivatives Exchange Limited (NCDEX) will expand the menu of products for trading. R. Ramaseshan, NCDEX Managing Director and CEO, said 54 commodities were being traded now. These include agricultural products, bullion, metals and energy.

NCDEX will set up a power exchange by October this year. It is not planning to enter currency exchange. The commodity exchange will introduce a warehouse management system in a bid to facilitate trouble-free trading.

He said NCDEX was planning to incorporate best practices in the world commodities trade. It would encourage investors and corporates to use the exchange platform for investing and hedging. The Indian farmer would be in a position to choose his cropping pattern based on the futures prices disseminated by the exchange, rather than the practice of sowing a particular crop based on current prices. The challenge is to first reach the farmer, educate him and convince him of the utility of adopting the future prices

NCDEX has a strong delivery system and about 50,000 tonnes of agricultural commodities are delivered every month. Physical deliveries in an electronic form (demat mode) were taking place in commodities such as gold, silver, jute, pepper, coffee, turmeric and pepper. The one-way trade in pepper had crossed Rs.100 crores per day.

He said NCDEX pepper futures are an ideal tool for price risk management for pepper processing and export industry.

In India, pepper is cultivated in Kerala, Karnataka and Tamil Nadu. Kerala accounts for 96 per cent of the area and 97 per cent of pepper production in India. Pepper prices are highly volatile and factors such as global and domestic production and international prices influence the domestic pepper prices.

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