National Commodity and Derivatives Exchange Ltd. (NCDEX) on Wednesday launched futures contracts in Isabgol seed for trading. The contracts are available for trading in four months from May to August 2023. Moving forward, the exchange will add new contracts as per the contract launch calendar.
Unjha in Gujarat being the traditional trading hub of Isabgol is the delivery center for NCDEX Isabgol Seed Futures contract.
Speaking on the occasion, Kapil Dev, Chief Business Officer, NCDEX said, “Isabgol is playing an important role in India’s agricultural export basket with Increasing overseas shipments. It was necessary to have an equally robust mechanism for exporters and traders to manage their price risks in an overall
volatile environment of this agriculture produce.”
The Isabgol seed contract will be a compulsory delivery based contract and will be traded at prices on ex-warehouse, Unjha basis center exclusive of GST. The contract will have a daily price limit of 6% on 4 + 2 basis.
India produces 1,50,000 MT to 2,00,000 MT Isabgol seeds annually which contributes 80% of global Isabgol seeds production. Gujarat accounts for 80% of the country’s Isabgol output, followed by Rajasthan and Madhya Pradesh.
Although the Indian Isabgol industry is yet to get organized, market sources assume India is the largest exporter of the Isabgol husk with a contribution of more than 85% of global consumption. However, despite having near monopoly in this medicinal agricultural produce, Indian growers as well as exporters are often exposed to volatility in prices due to various internal and external factors, raising the need for a tool that may provide opportunities in price risk management in the commodity.