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Informist, Friday, Mar. 28, 2025

 

By Pallavi Singhal

 

NEW DELHI – The National Commodity and Derivatives Exchange Ltd. is likely to launch weather futures in the next six months, according to Managing Director and Chief Executive Officer Arun Raste. "The Indian Institute of Technology, Delhi is already working on it. We have requested the India Meterological Department for weather data of the past 100 years. We expect to launch the program within this year," he said.

 

Citing the success of snowfall weather futures in the US, he said, "In a country like India where rainfall is key for agriculture, a rainfall futures is the need of the hour." Raste was speaking to Informist on the sidelines of Tefla's Maize and Millet Summit 2025.

 

In June 2020, the exchange had introduced two rainfall-based indices--Indian Rain Index and Indian Monsoon Index. The Indian Monsoon Index tracks the southwest monsoon for Jun-Sept, while the Indian Rain Index tracks the monthly performance of rainfall across the country.

 

India's agriculture sector depends heavily on the southwest monsoon, its progress and staggered withdrawal, for both kharif and rabi crops. Any uncertainty hurts not just the agriculture sector but other sectors as well.

 

AGRI-COMMODITIES TRADE BAN

The government recently extended the ban on futures trading in derivative contracts of seven agricultural commodities--non-basmati paddy, wheat, chana, mustard seed and its derivatives, soybean and its derivatives, crude palm oil, and moong--by another year till Mar. 31, 2026.

 

On the extension of the suspension, Raste said that with the ban on trading of these commodities, the exchange will likely be able to function for the next 2-3 years. "But we may have to shut down if it (the ban) continues any further," he said.

 

"We had really hoped for a different outcome at least for futures trading of some agri-commodities such as oilseeds," he added. NXDEX officials has been hoping for the government to allow futures trade in at least oilseeds and its derivatives, saying that India mostly imports to meet its cooking oil requirements.

 

In 2021, the government imposed a ban on derivatives trading in all the above seven commodities--non-basmati paddy, wheat, chana, mustard seed and its derivatives, soybean and its derivatives, crude palm oil, and moong--for a year to check rising prices. The ban was extended consecutively each year till December 2024, and extended three more times till Mar. 31 of next year.  End

 

Edited by Tanima Banerjee

 

 

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