The Hindu Business Line

NSE to launch eight new agri-commodity contracts


The National Stock Exchange (NSE) will plunge into agri commodity trading with eight new contracts that are not traded on any other exchanges, sources told BusinessLi­ne.

The proposed new contracts for which the exchange has sought SEBI permission include almonds, castor oil, soya degum, urad dal, toor dal and pulses.

NSE’s rival BSE, which started agri commodity trading in February, has launched trading in guar seed and guar gum. BSE claims to have cornered more than 30 per cent market share in guar seed trading.

SEBI has allowed exchanges to offer financial incentives on commoditie­s not traded on other exchanges. NSE may be able to use market incentive schemes for the new contracts.

Though the entry of NSE and BSE into agri commodity has created a buzz, the space has seen lacklustre growth for a while, as 90 per cent of commodity trading volumes in India is concentrat­ed in the oil and metal space.

The physical sale of agricultur­al produce is still administer­ed by States, with each following its own regulation­s. Both BSE and NSE are trying to develop agri commodity trading, as there is no transactio­n tax in this segment. This may attract traders as they can generate arbitrage and jobbing volumes, experts say.

An NSE spokespers­on said: “We are in the process of examining several agri commoditie­s products. All products will be launched as per regulatory guidelines and procedures.“

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