National Commodity and Derivatives Exchange (NCDEX), India’s agricultural commodity exchange, launched India’s 1st sectoral indices in agricultural-commodities space such as GUAREX and SOYDEX.
- GUAREX and SOYDEX were also India’s 1st return based agricultural futures index in agricultural-commodities.
Key Facts about the Indices:
i.These indices will be available on the NCDEX’s website to represent the performance of Guar complex and Soy complex. Futures trading in these indices will be launched later.
- GUAREX – It is the return based index, it tracks the change in the price of the futures contracts of Guar Seed and Guar Gum Refined Splits on a real-time basis.
- SOYDEX – It will also trace the price changes in futures contracts of Soybean and Refined Soy Oil.
- GUAREX will have a weightage of 63.43 percent guar seed and 36.57 percent guar gum refined splits.
- In SOYDEX, soybean and refined soy oil will have a weightage of 67.92 percent and 32.08 percent, respectively.
iii.Both the indices will be useful for hedgers to identify low-cost products. It will also offer trading strategies and risk management exercises
iv.Existing Index: In May 2020, NCDEX had launched AGRIDEX, a return-based composite index tracking futures price movement in 10 commodities on NCDEX. It has given over 40 percent return within 1 year of operations.
Points to be noted:
- Futures Contract-It is a standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future.
- Hedger – A hedger is any individual or firm that buys or sells the actual physical commodity. They are the primary participants in the futures markets.
Recent Related News:
On June 22, 2021, India and Fiji signed a Memorandum of Understanding (MoU) for cooperation in the field of Agriculture and allied sectors during a virtual meeting. This MoU will be executed by the Ministry of Agriculture & Farmers Welfare (MoA&FW) from India and the Ministry of Agriculture of Fiji.
About National Commodity and Derivatives Exchange (NCDEX):
It is regulated by the Securities and Exchange Board of India (SEBI).
Establishment – 2003
Headquarters – Mumbai, Maharashtra
MD & CEO – Arun Raste