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Add Sweetness in 2021 by Trading in NCDEX Gur

Add Sweetness in 2021 by Trading in NCDEX Gur

National Commodity and Derivatives Exchange of India (NCDEX) has again re-launched the future contract in GUR (Feed Grade) and will be available for trading from December 15, 2020, with a lot size of 10MT.

OVERVIEW:

Jaggery (GUR) is produced all over the country, wherever sugarcane is produced. Similarly, it is consumed in all parts of the country. Further, the product is seasonal in nature i.e. its production takes place only from October to April in a year but its consumption takes place throughout the year. It is primarily produced from Sugarcane.

Globally India is the leading producer of jaggery contributing to 60% of total production, where Brazil is the major exporter of jaggery and USA, China, Indonesia being the largest importer in the world. If we look into India, then Uttar Pradesh, Maharashtra, Karnataka and Tamil Nadu are the top jaggery producing states contributing to around 80% of the total production in India.

The major stakeholders in the GUR value chain include Farmers, Processors, and Traders who perform various activities from production, harvesting to processing, jaggery making, packaging and marketing.

FUTURE CONTRACT IN GUR:

As there has been continuous growth in the overall production of GUR and because of high volatility in its prices so to hedge the risk, NCDEX has launched the futures contract in GUR (Feed Grade). A considerable amount of total production of Gur is used as feed. Therefore, the price has a considerable impact on the overall feed cost.

Muzaffarnagar (Uttar Pradesh) is the basis centre for GUR Futures contract because of the availability of good infrastructure support and various processing units, Further, it is the only delivery centre for the same.

KEY BENEFITS:

  • Hedging can be done by the ones who are the major users of GUR as whether they are producers, commission agents, traders, processors or retailers.
  • Being the alternative of Sugar, it will be a good trading option as there are no active future contracts of sugar.

CONTRACT SPECIFICATIONS:                                                                               

  • Ticker symbol – GUR
  • Trading Unit – 10 MT
  • Delivery Unit – 10 MT
  • Maximum Order Size – 500 MT
  • Quotation / Base Value – per 40 Kg
  • Tick Size – Re.0.50 (50 paise)
  • Quantity Variation – +/- 5%
  • Basis – Ex-Cold Storage Warehouse Muzaffarnagar, inclusive of local taxes, exclusive of GST
  • Delivery Logic – Compulsory Delivery
  • Delivery Specification – Upon expiry of the contracts all the outstanding open positions shall result in compulsory delivery.
  • Due date/ Expiry Date 20th day of the delivery month – If 20th happens to be a holiday, a Saturday or a Sunday, then the expiry date (or due date) shall be the immediately preceding trading day of the Exchange, which is other than a Saturday.

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