Agridex returns touch 20.76% in May-October this year

Gayathri G Chennai | Updated on October 29, 2020 Published on October 29, 2020

The Agri Futures Index (Agridex), launched by the National Commodity and Derivatives Exchange (NCDEX) in May, has given 20.76 per cent returns so far.

The month of June (from May 26-June 20) saw volume of ₹174.19 crore. Although the numbers declined gradually in the coming months, it made a rebound in October with ₹21.02 crore as against ₹11.93 crore logged in September. Sources said the decline in volumes is because of the fact that it is a new product and is yet to gather momentum, apart from the effect of Covid-19. With ₹24-crore volume and 8.04 per cent returns, August seems to be the best performing month for the cash-settled agri index.

Top performers

Commodity-wise, RM Seed (Rapeseed-Mustard Seed) and Guar seed are the top performers.

Agridex has 10 leading liquid contracts including soyabean, chana, coriander, cottonseed oil cake, guargum, guar seed, mustard seed, refined soya oil, castor seed and jeera. The value of this index is generated based on the spot and futures of the underlying commodities. All these commodities have different weightage in the index depending upon the liquidity on the exchange platform and their production and consumption.

Ajay Kedia of Kedia Commodities told BusinessLine that prices of the high-liquidity commodities traded on the Agridex have gone up in the last 3-4 months due to the pandemic and food inflation surge. “Monsoonal vagaries or crop damages have led to higher prices of chana, for instance, and global trends like the US-China trade stand-off and a bumper harvest globally have impacted the prices of commodities such as corn and soyabean. The rise/fall in soya oil is correlated to other competing oils as well.”

Kunal Shah, Head of Commodities Research at Nirmal Bang, told BusinessLine that the rise in agri-commodities reflects the monetary policies adopted by US. “There is nothing drastic or speculative. When the greenback declines, commodity prices rise. In fact, this is a much-needed breather for market participants.”

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Published on October 29, 2020
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