By IANS,
New Delhi : India’s leading commodity futures exchange, the National Commodity and Derivatives Exchange (NCDEX), Wednesday launched trading in thermal coal futures contracts, it said in a statement.
With this, the exchange will now offer 57 different commodities for trading.
The commodities offered for trade are in agriculture, bullion, energy, metals (ferrous and non-ferrous), environment and plastics, the statement said.
The thermal coal futures contract will be an addition to its energy products offered for trading, it said.
While inaugurating the NCDEX coal futures contracts, chairman of coal trading company Gupta Corp Ltd Padmesh D. Gupta appreciated the initiative taken by the exchange to develop a transparent pricing platform for coal.
“I hope that this will serve as an effective benchmark for coal pricing and trends,” he said.
Gupta also hoped these contracts would serve as an effective hedging tool for those who participate in the coal sector value chain.
The unit of trading for thermal coal will be 100 tonnes, while the unit of price quotation will be in rupees per tonne.
The pricing basis will be ex-warehouse Nagpur, exclusive of sales tax and local levies, the statement said.
Deliveries will be offered and accepted in lots of 100 tonnes or multiples thereof.
Initially, contracts expiring Oct 31, Nov 28, and Dec 31 will be available for trading Sep 10, the statement said.
Coal, a fossil fuel, forms one of the main sources of energy internationally and is used to meet around two-fifth of the world’s electricity needs.
Besides, it is used as fuel in the production of steel, cement and other industrial activities.
As with most other developing nations, coal forms the most important source of energy for India, accounting for more than 50 percent of its total energy needs.
India is the third largest producer of coal in the world, with an annual production of 450 million tonnes. In terms of coal reserves, it is ranked fourth.
India’s total annual consumption is around 490 million tones. Domestic production, therefore, accounts for about 90 percent of the consumption. The balance 40 million tonnes is imported, primarily from Indonesia, South Africa and Australia.
“Keeping in mind the high price volatility of over 40 percent seen in coal prices over the last two years, NCDEX thermal coal futures contract would serve as an effective hedging platform for the entire coal value chain,” the statement said.
The exchange started operations Dec 15, 2003, and currently clocks an average daily volume (one-way) of about Rs.20 billion.