NCDEX suspends fresh position in Aug turmeric contract

Written by fe Bureau | New Delhi | Updated: Aug 8 2012, 08:21am hrs
The National Commodity and Derivatives Exchange (NCDEX) has barred traders from taking fresh positions in turmeric contract for August delivery from Tuesday until the expiry of the contract. fresh positions will be allowed in respect of Turmeric August 16, 2012 expiry contract from August 7 till the expiry of the contract. Only squaring up of existing positions will be allowed, the exchange said in a circular.

The financial gains made by taking fresh position in violation of the directive will go to the Investor Protection Fund of the exchange, it added.

Turmeric futures gained 4% to R6,608 a quintal on Monday to hit the upper circuit, although spot market prices were trailing by 18%.

Turmeric prices in Nizamabad market were ruling at R 5,600 a quintal. Low inventory level at most exchange-accredited warehouses had stoked the price rise in the futures market.

NCDEX also levied an additional margin of 5% on long and short side of castor seed, effective Wednesday. The margin will be applicable on all the existing and yet-to-be launched contracts of the commodity.

Late July, the FMC said it would ban some more commodity futures, if required, but wouldnt allow traders to manipulate prices.

Last week, FMC asked Multi-Commodity Exchange and NCDEX to more than double the initial margin on sugar and wheat to 10%, effective August 6, to curb volatility.