The commodities exchange, NCDEX, which had launched rubber futures on January 2, is targeting a daily business turnover of Rs 100-200 crore in the next one year.
Speaking at an interactive session here on Friday highlighting the key features of rubber futures, Mr H.C. Rameshchand, Executive Vice-President, NCDEX, pointed out that it is a compulsory delivery contract with the contract size of one million tonne, ticket size of Rs 10 and the delivery unit of one million tonne.
The main delivery centre is in Kochi and additional delivery centres are located at Kozhikode, Kottayam, Thrissur, Manjeri and Palakkad. An important feature of the contract is that it provides early delivery system. NCDEX has the most successful and proven delivery system facilitating delivery through its accredited warehouse service providers offering reduced charges, he said.
These warehouse receipts are negotiable instruments which can be used for financing from banks. The exchange is also working on other alternate modes of settlements for delivery to facilitate physical deliveries with least cost and addressing all the aspects of good delivery, he added.
Risk management
He also pointed out that the widening demand-supply gap in the international market makes price risk management very important for the value chain participants. The NCDEX rubber futures contract has been designed to benefit the value chain participants, while providing them with a single platform for price discovery and risk management.
Kerala contributes 90 per cent of India's total production of natural rubber and produces around 7.4 lakh million tonnes annually. The State is the largest consumer of rubber in India and consumes 20 per cent of the total rubber available domestically, he said.
According to Mr Rameshchand, NCDEX is also planning to launch 5-6 new commodities contracts shortly. The exchange has 1.5 million tonnes warehousing capacity in 700 locations across the country.
The average daily traded value has gone up by 22 per cent touching Rs 5,722crore in the last three quarters of the current fiscal against Rs 4,686 crore in 2010-11. The open interest has also gone up by 30 per cent, which is a good sign as more value chain participants are showing interest in NCDEX, he said.