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NMCE-approved warehouses offer multiple benefits
Move to increase warehouse space to store rubber
KOCHI: The National Multi Commodity Exchange of India (NMCE) has achieved its highest turnover since the launch of the contract, logging Rs.283 crore turnover on January 6. The highest turnover recorded so far was on April 21 last, Rs. 207.77 crore. The NMCE has also become favoured delivery centre for rubber growers as the stock quantity reached to 7,787 tonnes on Friday, said a press release here.
Though commodity exchanges are not ideal for giving or taking delivery and world over only 1 or 2 per cent of the delivery takes place, they become buyers or sellers at the time of crisis. Delivery keeps the price aligned with physical market and keeps a curb on the manipulators.
Now rubber growers are finding the NMCE-approved warehouses of CWC the ideal place for scientific storage. It gives multiple benefits to the suppliers. While the January price was Rs.215.90 a kg, the April price was Rs.235.30 a kg as on January 7, 2011. Thus the grower was selling forward and realising over Rs.19 a kg more and delivering rubber to the exchange warehouse if it had to receive funding from the bank against warehouse receipt and based on the forward sale on the exchange.
Anil Mishra, managing director & chief executive of NMCE, said: “We are seeing increased arrival of rubber in the exchange warehouse. Arrivals increased 89% year on year.
Last year, it was 3,480 tonnes as on January 1; this year it is 7,787 tonnes. The opening stock on December 1 was 3,014 tonnes, which increased to 7,468 tonnes, registering 247 per cent growth in net deposit during December 2010. There has been increased participation of hedgers and the open interest has gone up to 10,503 lots, which is 264 per cent of the daily traded volume on the exchange. The depositors are farmers' cooperative societies like Thodupuzha Societies & the Palakkad District Co-operative Society, NAFED, etc. For rubber delivery, the CWC has warehouses in Ernakulum, Aluva, Trichur, Kozhikode, Palakkad, Kakkanad and Kakkancherry. We are trying to increase more warehouse space to be able to stock more rubber that is arriving from growers, he said. In the Trade and Settlement Committee meeting of the NMCE held in Kochi, the stakeholders had agreed to the idea of tendering from exchange empanelled reputed sellers godowns as accredited warehouse for delivery to reduce the cost of delivery on which the exchange is working hard to implement, according to Mr Misra.
The NMCE along with the FMC had recently conducted training programmes for the members of the All India Rubber Industries Association in New Delhi and Jalandhar to educate its members on “How futures market is going to solve their problems of price risk management through hedging.”
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