NEW DELHI: Leading agri-commodity bourse NCDEX today announced a relaunch of futures trading in castor seed from tomorrow, nearly a year after its trade was suspended on the directions of regulator SEBI on suspected manipulation.
Rival-bourse MCX will also launch futures trading in castor seed from tomorrow itself.
In a statement, NCDEX said, "The exchange has received approval from SEBI for relaunching the contract after its suspension in January 2016."
Castor seed futures' contract expiring in the months of February, March, April and May, would be available for trading on the NCDEX platform from January 5, 2017, it said.
Last January, NCDEX had suspended futures trading in all castor seed contracts, suspecting manipulation and concentration of trades.
Regulator Securities and Exchange Board of India (SEBI) had even barred 16 entities from accessing the market and ordered a forensic audit. Meanwhile, another commodity exchange MCX has also got SEBI's approval for the launch of castor seed contracts. The exchange will launch the contracts tomorrow.
While granting the approvals, SEBI has asked the exchanges to ensure that the quality of commodities deposited meets all compliance requirements under the rules including that of FSSAI. Besides, the contracts will have to be as per the rules and regulations of SEBI and as per the approved contract specifications and launch calendar.
NCDEX Managing Director and CEO Samir Shah said, "It is indeed heartening to have the regulator's confidence and the support of market participants. We have significantly strengthened risk management framework under the guidance of SEBI and we look forward to the successful relaunch of the castor seed contact." T
he exchange said that castor seed futures contract serves a larger economic purpose as it is a crucial risk mitigation tool for castor seed, oil processors and exporters who need to hedge their exposure to price risk.
Castor seed output this year is estimated to drop by 30 per cent to 10 lakh tonnes, from an average 14-15 lakh tonnes in the last few years, due to drought and shift to other crops because of sharp fall in prices, as per the trade data.
Rajasthan and Gujarat lead in castor seeds cultivation in India.