NCDEX average daily turnover jumps 47 per cent despite trading ban on key commodities

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The National Commodity and Derivatives Exchange has reported a 47 per cent increase in average daily turnover at ₹1,857 crore in the financial year ended March 2022 against ₹1,261 crore logged in the previous fiscal.

This was largely driven by sharp spike in agriculture commodity prices last year due to supply chain disruptions.

The ADTV on the commodity bourse had crossed the pre-pandemic level of ₹1,794 crore. The growth was despite suspension of some top-traded contracts such as soya complex, mustard and chana among others, said the exchange.

The exchange maintained its leadership position in the agriculture derivatives segment with a market share of 80 per cent.

Higher participation

Arun Raste, Managing Director and Chief Executive Officer, NCDEX, said the financial performance of the exchange highlights resilience, risk management behaviour of market participants, especially in agriculture sector when the commodity market is passing through a difficult phase due to unprecedented geopolitical turmoil.

The open interest, a barometer to gauge the seriousness of market participants, increased 32 per cent to ₹3,554 crore (₹2,695 crore).

Kapil Dev, Chief Business Officer, NCDEX, said it was a challenging year for the agriculture derivatives ecosystem on account of suspension of some key commodity derivative contracts.

However, he said during uncertainty and high volatility value chain participants need the derivatives market even more for risk management and this is evident by increased participation in all commodities, he said.

The exchange has linked over a million farmers to the exchange platform through over 400 Farmer Producer Organisations (FPOs).

The agricultural landscape is witnessing a rapid change with exports crossing the $50 billion-mark last year and India emerging as a key sourcing hub for a number of farm products. This transition will certainly lead to increased opportunity for the exchange, he said.

Published on April 21, 2022