NMCE amends due date rate for all commodities

Ahmedabad, Aug 21: In the wake of long-standing market demand, the National Multi-Commodity Exchange (NMCE) has amended the process of deriving ''due date'' rate for all the commodities traded at exchange's terminals to three days from September 2007 contracts onwards.

The exchange has amended the relevant bye-laws to ensure convergence of the futures and spot prices to ensure they are closer to the nearest volatility in the prices. The amendment was mooted and now approved by the Forward Markets Commission (FMC) and the change comes into effect from the September 2007 delivery month contracts onwards.

The due date rate will be derived by averaging out the last three days' spot prices, which fall in the delivery month at the main centre specified in the contract design, and at other delivery centres specified by the exchange. At present, the due date rate in certain commodities at NMCE is derived for the last five days prior to the maturity date.

In another development, NMCE has started Nizamabad in Andhra Pradesh as an additional delivery centre for the Nizamabad variety of turmeric at seven per cent discount, with certain changes in quality parameters in the Erode basis variety of turmeric.

NMCE had introduced Erode variety of turmeric for futures trading at Erode in Tamil Nadu last June and subsequently the Nizamabad variety. The latest changes in the specifications for additional delivery centre will become effective following an approval by the market regulator, FMC.

India produces about 56 lakh metric tonnes (MT) of turmeric annually, contributing almost 80 per cent of global production, with Andhra Pradesh and Tamil Nadu are the major producing states. The country exports around 35,000 MT of turmeric.

UNI