The response to the National Commodity and Derivatives Exchange’s launch of its first gold futures contract with focus on South India about two months ago has been poor.

The exchange had launched its gold 100 gm contract in mid-January with Hyderabad as the main delivery centre and Chennai as an additional centre. It was betting big on this contract, as southern States account for nearly 45 per cent of the country’s demand for the yellow metal.

NCDEX is now re-working its strategy to rope in more participants through additional services. For the moment, it will not set up any new additional centres till a “critical mass” of participants was in place.

“The response has been slow. We need to do some more work. We are now talking to participants to understand if there are any gaps in the scheme,” said Vijay Kumar, Chief Business Officer of NCDEX over the phone from Mumbai.

The exchange launched the scheme to facilitate deliveries of the metal in cities within the main consuming region, covering the four States in the South. These States account for almost 60 per cent of the country’s import of 100 gm gold.

Kumar said the exchange was also trying to add other non-agricultural commodities in its futures portfolio. Apart from gold, it has steel as the only other non-farm commodity on its trading platform.

Increased demand from secondary steel producers has pushed up trading in steel contracts in the last few months, with deliveries climbing up to 30,000 to 40,000 tonnes.

Encouraged by the growing volumes in steel trade, the exchange will be adding scrap and hot rolled coil steel in its portfolio. “We are also looking at PVC (polyvinyl chloride). These may take six to eight months for regulatory clearances and final launch,” Kumar said.

> amitmitra@thehindu.co.in

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