On this episode of The State of the Economy Podcast, Subramani Ra Mancombu and Arun Raste, Managing Director and CEO of NCDEX Commodities Exchange, discuss the exchange’s progress in futures trading and derivatives, and ways to improve returns for farmers.
NCDEX is showing growing interest in futures trading and derivatives, with agricultural commodities such as spices and guar gum doing well due to international price trends. The CEO highlighted the exchange’s role in attracting new players, including corporate institutions previously focused on other commodities.
Raste highlighted the potential of options trading as a complementary tool to Farmers’ Minimum Support Price (MSP). Options provide a form of price insurance, ensuring farmers receive a predetermined price regardless of market volatility, he explained. This approach enables farmers to manage risk and benefit from potential price increases. He also spoke of the need for government support and private sector involvement to facilitate options trading among farmers and reduce the burden of MSP subsidies.
Regarding farmer participation, Raste discussed the initial challenges and the role of Farmer Producer Organizations (FPOs) in facilitating options trading. He mentioned that while some FPOs initially required subsidies to participate, more and more FPOs are now willing to participate without financial support. Initiatives in Maharashtra and discussions with NABARD (National Bank for Agricultural and Rural Development) show growing interest in options trading at the regional level.
Going forward, NCDEX plans to launch new products, pending regulatory approval. Proposed additions include contracts for sunflower oil and carbon credits, expanding the range of trading options available on the exchange. The CEO expressed optimism about the potential benefits of these innovations for farmers and the wider agricultural sector.
Listen to the podcast to learn more about NCDEX Commodity Exchange’s efforts to facilitate futures trading, derivatives and options trading, benefit farmers and build resilience in the agricultural sector.
(Moderator: Subramani Ra Mancombu, Producers: J Jayapriyanka, Siddharth MC)
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