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<strong>CEREALS</strong> FUTURES<br />
Cereals Futures Launch: <strong>NCDEX</strong><br />
Cereals are important ingredients of everyone’s meal and price<br />
consumer, trader or investor, have you ever thought of using futures<br />
traded on these commodities for price risk management and including<br />
cereal futures as an asset in your investment portfolio Yes, cereals as<br />
assets! Trading in grain futures goes back a long way. These were the<br />
Maize and Wheat (BMW) are three cereals traded on the leading national<br />
agri commodity exchange of the country, <strong>NCDEX</strong>.<br />
Value chain participants can hedge their price risk using the tool of<br />
Cereal futures traded on the Exchange. Those expecting a rise in prices<br />
can buy futures contracts whereas those projecting a downfall may sell<br />
Barley<br />
December 2006<br />
Maize<br />
January 2005<br />
Wheat<br />
July 2004<br />
taking position based on directional view on future prices, cash and carry arbitrage and calendar spread.<br />
BARLEY<br />
In India, production of Barley which is grown in Rabi season has varied in the range of 1.20 to 1.69 million MT in the<br />
last decade. This grain serves as base malt for beer and certain distilled beverages, as a major animal fodder and as a<br />
component of various health foods. It is used in soups and stews, and in barley bread of various cultures. In India, Rajasthan<br />
is the major state producing Barley and therefore, Jaipur (main trading centre) has been selected as the basis centre for<br />
the <strong>NCDEX</strong> Barley futures contract. Other two major states cultivating Barley are Uttar Pradesh and Haryana. Consumption<br />
demand for Barley in India mainly comes from malt, poultry and animal feed. Barley malt is mostly used in the production<br />
of alcoholic beverages in the country. India’s participation in the world barley trade in the past few years shows that the<br />
highest exports were recorded in the year FY 2007-08 to the tune of 3.48 lakh MT. Main export destinations for Indian<br />
Barley include Saudi Arabia, UAE, Yemen and Kuwait.<br />
Futures on this cereal is most liquid on an Indian Commodity Exchange (i.e. <strong>NCDEX</strong>) recording the highest number of<br />
trades.<br />
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