BSE to launch three new agri futures contract

Notwithstanding the ragging controversy in NCDEX over investors defaulting in castorseed contract, the Bombay Stock Exchange will launch castor futures contract on its commodity platform on Monday.

In fact, BSE will expanding it agriculture contract offering by launching futures on chana and soyabean on Monday with the option of compulsory delivery on all the three new contracts starting from November.

The country’s largest agriculture commodity exchange NCDEX had to extinguish castor contracts worth Rs 735 crore or 50 per cent of open interest using the contract tear-up option for the first time-ever after some of its members started defaulting on margins as prices plunged from a high of about Rs 5,600 a quintal to a low of Rs 4,270.

In fact, the October contract of castor seed on NCDEX hit the lower circuit of four per cent for the seventh consecutive day on Friday.

Asked about the timing of castorseed contract launch, Sameer Patil, Chief Business Officer, BSE, said the new launches has nothing to do with the trouble in the other exchange but the trade has been pushing BSE for launching new agriculture futures ever since market feedback was sought.

To start with, BSE will have three castorseed contracts expiring in November to January. It will launch February contract next month and subsequent months will be launched from December.

The contract will have Patan in Gujarat as the basic delivery centre while Deesa and Kadi will be additional delivery centres. The open position limit for the near month contract has been fixed at 3,750 tonnes for individual clients and at member level it will be 15,000 tonnes or one-fourth of the member’s overall position limit in that commodity, whichever is higher.

BSE will have three contracts of chana expiring from November to January and the basic delivery centre would be Bikaner in Rajasthan with additional delivery centres in Akola (Maharashtra) and Jaipur (Rajasthan).

The exchange will launch four new contracts in soybean expiring from November to February. The basic delivery centre would be Indore in Madhya Pradesh and additional delivery centres at Akola, Nanded and Hingangath in Maharashtra besides Vidisha and Mansour in Madhya Pradesh.