National Stock Exchange of India Limited (NSE) will launch its first agricultural commodity futures contract for crude degummed soybean oil on December 1. The futures contract will have a lot size of 10 metric ton (MT) and Kandla as the price basis. It will be settled by cash on a monthly basis. The contract will help the soybean oils processing and allied industries in India and overseas, NSE said in a statement dated November 9.
Vikram Limaye, MD and CEO of NSE said the exchange is dedicated to deepen the commodity markets in India by providing convenient and cost-effective onshore hedging products. "India, being one of the largest consumers of edible oils in the world, requires an efficient hedging mechanism for crude soybean oil as well. This product will work as a perfect price risk management tool for the market participants and the commodity ecosystem at large," he added.
India is the largest importer of edible oils in the world. The futures contract will act as a perfect hedging tool for the soybean oils processing and allied industries in India and overseas to manage their price risks.
Agricultural commodities are being currently traded on the National Commodity & Derivatives Exchange Limited (NCDEX), which is the leading agricultural commodity exchange in India, and also on Multi Commodity Exchange (MCX). Soybean oil is available on both these exchange trading platforms.