Financial Daily from THE HINDU group of publications
Wednesday, Nov 19, 2003
Financial Daily from THE HINDU group of publications Wednesday, Nov 19, 2003 |
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Agri-Biz & Commodities
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Commodity Exchanges Sugar online Nov contracts settled Dhimant Bhatt
Mumbai , Nov. 18 FOR the first time, the country's sugar online futures' November contracts were settled last week at EsugarIndia, the only sugar specific futures exchange. "We are happy to have settled the country's maiden sugar futures contracts on November 10 at our exchange," Mr Himanshu Shah, CEO of EsugarIndia.com, told Business Line. Twenty-five members began trading in sugar futures on July 25 this year. The first two November contracts, Grade Medium and Grade Small, were settled last week. The base prices were set at Rs 1,420 per quintal and Rs 1,390 a quintal, respectively for both the Grade M and Grade S contracts. A total of 141 contracts were traded for Grade M and 180 contracts for Grade S till they matured on November 10. "Around Rs 45 lakh worth of sugar was traded through 321 contracts in two grades," Mr Shah said. Usually, sugar is traded in only two varieties — medium (M-30) and small (S-30). In Grade-M contracts, members squared off all open positions. On the maturity date of Grade-S contracts, an open position remained for 15 contracts, which was settled in cash at Rs 1,342 based on the market price of the underlying commodity in APMC Markets — Navi Mumbai, as on that date. The settlement price for Grade M contract was declared at Rs 1,411 based on the market price of the underlying commodity in Muzaffarnagar mandi. The online futures trading system had made available a platform for the sugar industry to trade on those periods when sugar quota announcements were not made by the Government, Mr Shah said. The two contracts are primarily for two main markets — the North and the West — which collectively meet over 60 per cent of the country's sugar supplies. Grade M is for the Muzaffarnagar delivery centre for the North and Grade S is primarily for the western markets (Mumbai Agricultural Produce Market Committee - APMC Market). Further, since the bulk of the trade in North India is of Grade M, the base variety for the contract deliverable in Muzaffarnagar is Grade M, with delivery of few other grades also permissible with appropriate discounts/premiums.
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