The National Commodity and Derivatives Exchange (NCDEX) on Monday launched futures contract on NCDEX GUAREX. NCDEX GUAREX is a price-based index that will track the price movement in the futures contracts of its underlying like Guar Seed and Guar Gum Refined Splits on a real-time basis.
“I take pride in announcing the launch of NCDEX GUAREX futures — India’s first sectoral agri-index futures contract. I am sure the contract will garner interest from all sets of participants, including the physical market participants,” NCDEX Managing Director and Chief Executive Officer Arun Raste said.
Earlier on 5 July, 2021, the Exchange had launched the indicative or spot contracts for NCDEX GUAREX disseminating the real-time values on its website. GUAREX futures is a cash-settled contract and that includes an entire sector within one product.
Initially, NCDEX GUAREX futures contracts expiring in September 2021 and October 2021 will be made available for trading. The weightage of Guar Seed and Guar Gum Refined Splits in the index will be 63.43 per cent and 36.57 per cent, respectively, according to a statement.
“NCDEX GUAREX will soon be able to establish itself as a benchmark for the Guar Complex, both in the domestic and international markets, making it a value proposition for Eligible Foreign Entities, to hedge their price risk on Indian bourses,” Raste added.
GUAREX Futures is a price-based index and, hence, has immense potential while adopting different trade strategies such as arbitrage and calendar spreads, NCDEX Chief Business Officer Kapil Dev noted. “A cash-settled product, which is easy to trade, will not only appeal to retail participants but will also reckon with the requirements of the institutional players like mutual funds,” he added. India is the world’s largest Guar producer accounting for 80-85 per cent of the world’s output and Rajasthan is the country’s top producer with 80 per cent market share in the domestic market, the statement stated. India exports bulk of the Guar in split or flour form called as Guar Gum that is mainly used by the Oil and Gas industry in shale oil facilities. Guar Gum is also consumed by food, pharma, paint and other industrial sectors.