Mumbai, December 10:  
NCDEX has received commodity market regulator Forward Markets Commission’s approval to launch forward contract in 17 new commodities, including major cash crops.
Of the two commodities in which forward contracts are allowed, maize attracted 2,714 tonnes and sugar registered 596 tonnes of trade in last two months.
The exchange will launch forward trading in barley, castor seed, 29 mm cotton, chilli, coriander, crude palm oil, chana, guar gum, guarseed, jeera, mustard seed, refined soya oil, shankar kapas, soyabean, turmeric, cotton seed oil cake and wheat.
Ideal tool’
Unlike in futures where contract specifications are standardised, forward contracts allow buyers and sellers the flexibility to trade with diversified requirements while reaching out to traders across the country.
This, coupled with lower cost of trading and reduced counter-party default risk, makes it an ideal tool for the trade, said the exchange.
FPOs
NCDEX offers concession in minimum networth criteria and charges for the Farmer Producer Organisations, helping them not only get fair prices but also reach out to national market. About 21 new entities have applied for membership in the Commodity Participant Members category of which 60 per cent are FPOs.
Samir Shah, Managing Director, NCDEX, said bringing forward trade under the regulatory framework along with spot and futures trade and integration of these three segments would provide market participants with a more efficient tool to manage commodity-price volatility.