Timely action by NCDEX helps; Record deliveries in Castor seed contract

Mumbai, February 5, 2015: Scores of traders have applauded the timely action taken by NCDEX, the leading agricultural commodity exchange, to ensure that small traders and market participants could deliver a record quantity of castor seed on the Exchange platform in the January 2015 expiry futures contract.

In an unprecedented move, over 300 trade participants were able to deposit more than 2 lakh tones castor seed in NCDEX approved warehouses within 26 days. At its peak, close to 1000 tonnes of stocks were being unloaded daily in warehouses spread across Gujarat.“The proactive approach in arranging additional space in exchange approved warehouses was remarkable and saved us from major financial losses,” said Manoj Agrawal, Director, Shah Leaf in Company Pvt Ltd., a trader from Jaipur.

In view of the very high open interest and possibility of increased deposits of castor seed, the staggered delivery period for the January 2015 contract was advanced by 11 days to December 29, 2014. This was done to encourage more deliveries on the exchange platform and to prevent short squeeze. 

NCDEX used its robust deposit and delivery mechanism to direct the flow of customers to an expanded network of warehouses, minimizing waiting times and reducing inventory differences. The Logistics team added 50 warehouses in Kadi, Patan, Deesa to raise storage capacity by 2.5 lakh tonnes.

COMTRACK, the Exchange’s electronic system for accounting of commodities, combined with the on-ground Logistics team, optimized the delivery process, allowing trucks to leave the warehouses in rapid time.

An average of 78 trucks were unloaded daily during the delivery period, against the 20 trucks unloaded routinely. On some days, the number of trucks handled touched 93 trucks, almost five times of the normal deposit activity.

Real time information and state-of-the-art technology kept the Exchange abreast of deliveries status. This information was also displayed on the NCDEX website for the benefit of the market participants. Well-informed staff at warehouses ensured that depositors were quickly re-directed to a more convenient location if required. The online display of storage capacity also helped in directing the flow of customers.

Samir Shah, MD & CEO, NCDEX said, “We are committed to making trading simpler, safer and smoother for our participants and we have been ably supported by our warehouse service providers who have partnered us in scaling up our services to clients. It is indeed heartening to note the positive impact our efforts have had on the businesses of our participants and the trust they repose in us drives us to further strengthen our efforts.”

Castor seed stock in the Exchange approved warehouses which was 2.05 lakh MTas on December 19, 2014 increased to over 4.30 lakh MTas on January 19, 2015. This is the highest ever stock of any commodity deposited on the exchange platform. The Exchange recorded delivery of over 2.03 lakh MTof castor seed valued at Rs. 947 crore in the January 2015 contract.