commodities exchange of India, National Commodity and Derivatives Exchange (NCDEX), held its annual “NCDEX Commodity Awards” in Mumbai last week, awarding key players in the industry.
This was the third edition of the awards that saw a significant expansion in its scope and scale to include all participants of the commodities ecosystem.
As many as 58 entities and individuals were awarded across different categories. The awardees included institutional players, hedgers, market intermediaries, agritech startups, financial institutions, media houses, farmer producer organisations (FPOs), and self-help groups.
The chief guest was Dr Ashok Dalwai, CEO of the National Rainfed Area Authority (NRAA), who has led the committee on doubling farmers’ income. Narinder Wadhwa, President of the Commodity Participants’ Association of India (CPAI), was the eminent guest representing the association.
Dr Dalwai in his speech highlighted the importance of agri derivative tools in ensuring the price risk management for various value chain participants. “Value chain participants use futures and options to hedge their price risk and ensure business viability. With put options, farmers or FPOs can lock their selling price right at the time of sowing. This is a very good way of price risk management,” said Dr. Dalwai.
Dr Dalwai stressed on the need of a strong regulated futures market as “that helps in developing a solid agri marketing infrastructure, especially in the warehousing arena.”
Among those felicitated were four FPOs, from Gujarat, Maharashtra, Madhya Pradesh, and Rajasthan, for incorporating best farming and agricultural marketing practices, and two resource institutions (RIs) for significant contribution to helping FPOs.
Tata Mutual Fund and Alpha Alternatives won in the institutional participants’ category, while
, , and won from the banking sector.
Other awardees include warehousing service providers, a clearing member of the exchange, national and regional media entities, several value chain participants (VCPs), and NCDEX members.
“I never expected that our small initiative three years ago, to honour our stakeholders with Commodity Awards, would become so popular that it needed scaling up of the scope and categories of awards, including a change in the title of the event. I am extremely happy in acknowledging the invaluable contribution put in by all awardees in the progress of the commodity ecosystem,” said Arun Raste MD & CEO of NCDEX. He added that NCDEX continues to remain committed to the development of the commodity derivatives market to create a robust risk management platform in the country.
Narinder Wadhwa, National President of the Commodity Participants’ Association of India said, “CPAI is always committed to enhancing the value of the market and is continuously working towards making it a transparent, safe and vibrant market. Our aim is always to engage with the regulator, exchange, experts, members of the exchange and other value chain participants for the growth of the market. CPAI has planned a series of programs in coming months for creating awareness about hedging, and skill development for our members, FPOs and other participants.”
Last year, the Securities and Exchange Board of India imposed a one-year suspension on futures trading in seven commodities that were traded on the NCDEX. The move was largely believed to curb the price rise in these commodities even though the market watchers debate the efficacy of such a move in containing price rise and term it regressive and counter-productive in the development of agri derivatives market in India. Market watchers have urged the regulator to reconsider these bans, as they hurt price discovery and lower confidence in India’s effervescent agriculture sector.
Kapil Dev, Chief Business Officer of NCDEX discussed the role of agri derivatives vis-a-vis the agricultural economy through a presentation. “Derivatives market is playing an important role in the development of agriculture per se. Especially in the Indian context, agri derivatives are not limited to trading only. Rather, it helps in infrastructure strengthening for agri marketing, price signalling for the value chain participants, technology innovation etc. It is impacting a large panorama of the economy because of which we are seeing other stakeholders also joining and taking the market to the new set of participants,” he said.
NCDEX has rolled out a slew of new comeback initiatives to boost the market sentiments and provide depth in the derivatives market. The Exchange has launched a liquidity enhancement scheme (LES) in Guar Seed Options and Guarex contracts and plans to start the same in Steel contract in the coming days. It is also planning to launch futures trading in coffee by the end of June this year whereas polyvinyl chloride (PVC) contract is in offing. These new launches mark a remarkable shift in NCDEX’s strategy to introduce new contracts in non-price-sensitive commodities.
NCDEX accredited warehouses and futures trading model has been influential globally. It has been catching the attention of nations looking to reduce agricultural produce waste. Most recently, it caught the eye of the Kenyan government that sent a high powered delegation to study various aspects and models created by NCDEX group companies.
In March, the exchange’s Investor Protection Fund Trust launched India’s first call centre dedicated to farmers and FPOs to impart complete knowledge about agricultural derivatives and related market infrastructure services. The same month, it also launched trading in the futures contract on refined castor oil.
The ceremony aimed to touch every facet of the agri ecosystem and recognise synergies that will in future enable exponential growth.
Disclaimer: This article has been produced on behalf of NCDEX by Mediawire team.