| The Castor Seed June-2008 contract of the National Multi-Commodity Exchange (NMCE) registered a landmark physical delivery of 4,120 Metric Tonnes (MT) at its various godowns at designated delivery centre at Kadi. It amounts to 16.43% of the total trade, which is very high percentage of delivery.
Several members from different parts of the country, while participating at the NMCE's Castor Seed Committee's Review Meeting here expressed their satisfaction at hassle-free delivery and payment for such huge underlying assets.
Meanwhile, many investors interested in 'Vyaz Badla' and attracted to trade on NMCE have expressed plans to hold the physical castor and deliver it against their August-2008 contract.
The bimonthly futures contract of Castor seed (10 MT) is traded on NMCE in lots of 10 MT (10,125 kg to be precise) and the price quoted in rupees per quintal. When the June-2008 contract expired on June 14 last, the closing prices of June and August contracts were Rs.2,680 and Rs.2,771 respectively, and the June-August spread was in the range of Rs.126-128.
Commenting on the occasion, NMCE Chief Executive Officer (CEO) Mr Anil Mishra said that several meetings of product committee were held, warehouse facilities were arranged and producers, investors, industry consumers and traders were approached. He thanked all the stakeholders for the hard work to ensure successful and smooth delivery.
The success of the smooth delivery at NMCE is attributed to a sound and reliable warehouse receipt system for a fair settlement of all outstanding positions. In the traditional system of castor seed futures, since the delivery is from the seller's godown to be lifted by the buyer, it is a hassle which normally results into serious disputes.
In the traditional exchanges, normally, the buyers are required to square their positions prior to the beginning of delivery period to avoid the hassles of delivery. Hence most of the trades on traditional exchanges are speculative which lacks price risk management and the discovery of price which is the basic objective of the futures. |