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Informist, Thursday, Jul. 3, 2025

--NCDEX, IMD sign MoU for weather-indexed futures, aligned with crop cycles

MUMBAI – The National Commodity and Derivatives Exchange Ltd. has signed a memorandum of understanding with the India Meteorological Department for weather-indexed futures, aligned with crop cycles, the exchange said in a release. NCDEX will develop a rainfall-based derivative product from historical and real-time data sourced from the weather bureau.

"This strategic alliance lays the critical groundwork for the launch of India's first weather derivatives--a long-anticipated market instrument designed to help farmers and allied sectors hedge against climate-related risks such as erratic rainfall, heatwaves, and unseasonal weather events," it further said in the release.

Monday, Informist had exclusively reported, quoting a senior NCDEX official, that the weather agency and the exchange had signed a memorandum of understanding and the exchange would use data feed on rains and the progress of the monsoon for the Indian Rain Index and Indian Monsoon Index. Earlier, Skymet provided data for these indices. However, the indices have not been updated after the exchange's contract with the private weather forecaster ended, the official said.

Arun Raste, managing director and chief executive officer, NCDEX, said, "This partnership with the India Meteorological Department opens the door to a new era in commodity markets.... With climate volatility increasingly affecting productivity and income of farmers, these instruments provide a market-based solution to weather risk."

Mrutyunjay Mohapatra, director general of meteorology at the weather agency, said, "Through this collaboration with NCDEX, we are extending our scientific capabilities into the financial domain, allowing weather data to become a powerful instrument of economic stability and market innovation."  End

Reported by J. Navya Sruthi

Edited by Nishant Maher

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