The National Commodity & Derivatives Exchange (NCDEX) plans to launch a forward contract on its national level electronic platform from Thursday.
Unlike futures contracts, the quality and quantity of the commodity traded through forward contracts are decided mutually by the buyer and seller. The exchange provides guarantee for delivery.
Dubbed as Agrim Sauda, the facility will offer the benefits of transparent trade practices and national market reach through registered Farmer Producer Organisation.
Samir Shah, Managing Director, NCDEX, said the country needs well functioning agricultural markets to raise the income of farmers and provide high quality food to 1.25 billion consumers.
In addition to the farmers, Agrim Sauda will help almost every participant in the segment including processors, exporters, traders and other value chain members.
The Government procurement agencies can also benefit from this segment.
The facility may make price predictability less onerous and contribute to the development of storage infrastructure for traded commodities, said the exchange.