NCDEX to launch Futures Contract on AGRIDEX

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Mumbai, May 20, 2020: India’s leading Agri commodity exchange, National Commodity and Derivatives Exchange Limited (NCDEX) has announced the commencement of trading in the country’s first agri Futures Index, NCDEX AGRIDEX.

The NCDEX AGRIDEX Futures contracts expiring in the months of June 2020, July 2020, September 2020 and December 2020 shall be available for trading from May 26, 2020

AGRIDEX represents a basket of ten liquid Agri commodities on NCDEX and will serve as a broad benchmark for India’s strong agricultural sector.

Announcing the launch, Mr. Vijay Kumar, MD & CEO, NCDEX said, “Agriculture is key pillar of the Indian economy and contributes significantly to employment and economic growth. NCDEX has always played an important role in providing risk management tools for the Indian agricultural value chain. The introduction of AGRIDEX Futures is another important step in the same direction. AGRIDEX Futures contracts will provide investors one more tool for trading and risk management at a composite level.” 

Return-based index

AGRIDEX is a return-based index comprising of ten liquid commodities traded on NCDEX.  It has commodity wise and sector wise floors and caps, with no single commodity or sector dominating the index. AGRIDEX has very low correlation with other asset classes and Indices.

AGRIDEX Futures provide a diversified cash settled instrument for investors seeking portfolio diversification, and will serve the needs of both institutional and retail participants. 

To ensure diversification, no group of related commodities may constitute more than 40% of the total weightage in the Index. The rollover will be done on the first 3 days of the expiry month and the Index would be rebalanced annually on the first business day of April. A Floor and a cap is enforced upon the weights of each commodity. Sector-wise capping is done based on aggregated weights of each sector. AGRIDEX is a comprehensive agri commodities Index which provides a holistic view over this segment. 

Mr. Kapil Dev, Head- Business, NCDEX said, “Futures on AGRIDEX are an important addition to the agricultural derivative products on NCDEX, and the first tradeable commodity index based on Indian domestic prices. Since AGRIDEX Futures Contracts provide a diversified cash settled instrument it will help in widening participation on the Exchange from both institutional and retail investors.”

NCDEX has partnered with NSE Indices, a leading Index service provider, to maintain and disseminate real-time NCDEX AGRIDEX values.

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