The National Commodity Derivatives Exchange (NCDEX) has launched two agriculture-focused commodity indices NCDEX Guarex and NCDEX Soydex. It expects to launch futures trading in these indices soon.
Guarex will track price movement in the futures contracts of its underlying Guar Seed and Guar Gum Refined Splits on a real-time basis. Similarly, Soydex will follow the price changes in futures contracts of Soybean and Refined Soy Oil.
Return-based index
Arun Raste, Managing Director, NCDEX, said this is the first return based agricultural futures index in agriculture commodities.
Initially, both the indices will be available on the exchange’s website to gauge the performance underlying commodity.
The new indices will offer trading and risk management opportunities for value chain participants, he said.
The weightage of Guar Seed and Guar Gum Refined Splits in Guarex will be 63.43 per cent and 36.57 per cent. In Soydex, Soybean and Refined Soy Oil will have the weightage of 67.92 per cent and 32.08 per cent.
Being cash-settled contracts, Guarex and Soydex will become perfect products for hedgers who have been in a constant search of low-cost products.
SEBI’s cross margin benefit will further sweeten the deal for hedgers in terms of significant reduction in the transaction by using these indices, said Kapil Dev, Chief Business Officer, NCDEX.
Last May, the exchange launched Agridex which had given over 40 per cent return in last one year.