The Hindu Business Line : NCDEX launches groundnut in shell, oil futures contract

On the first day, groundnut (expeller) oil March 2006 contracts opened at Rs 471.25 for 10 kg and settled at Rs 474, while groundnut (in shell) March 2006 contracts opened at Rs 360 per 20 kg and closed at Rs 370.80.

The total volume of groundnut expeller oil futures (all contracts) and groundnut (in shell) futures (all contracts) was 1,315 tonnes and 3,820 tonnes, respectively.

"The launch of groundnut expeller oil and groundnut (in shell) is a significant step for the exchange and to the participants in the market. Both the products are new to the commodity exchanges," said Mr Tapan Mishra, Assistant Vice-President, NCDEX.

The basis price for groundnut expeller oil is ex-warehouse Rajkot (Gujarat), exclusive of sales tax/VAT. The initial contracts available for trading would be for expiry in March, April and May.

The basis price for groundnut (in shell) is ex-warehouse Junagadh (Gujarat), exclusive of sales tax/VAT.

The initial contracts available for trading would be for expiry in March, April and May.

With the launch of these contracts, NCDEX has become an exchange, which offers the whole basket of futures contract in the edible oil complex, including mustard, soya oil and palm oil.

Groundnut (in shell) futures contract will also meet the exporters' requirement to hedge the HPS groundnut price risk.

These futures contracts are expected to provide good opportunity for participants to hedge their price risk as the annualised volatility in groundnut expeller oil is almost 39.34 per cent, and the annualised volatility in groundnut (in shell) is almost 25.62 per cent

Groundnut is one of the largest oilseeds produced in the country.

The groundnut expeller oil and groundnut (in shell) contract will provide a window to domestic traders, processors and exporters to hedge their price risk.