The National Commodity and Derivatives Exchange (NCDEX) will ease margin requirements for futures trading of castor seed and turmeric from Wednesday.
A special margin of 10% on the long side and an additional margin of 5% on both long and short side on all the running as well as yet-to-be launched contracts in castor seed will be scrapped, the exchange said in a circular. December castor seed futures rose in early trade due on speculative buying enquiries.
Similarly, special margin on long positions of turmeric contracts will be cut by a half to 20%, it said in a separate circular.
The new margin will be applicable to all running turmeric contracts and yet-to-be-launched contracts.
The benchmark October Turmeric contract on the NCDEX has slumped by around 7.5% so far this month. Turmeric futures declined in intraday trade on Tuesday on weak demand and better harvest prospects. The October turmeric contract on the NCDEX shed 0.88% to R5,652 per 100 kg. Spot turmeric in Nizamabad dropped R70 to R5,616 per 100 kg.
Earlier this month, NCDEX relaxed margin requirements on futures trading of potato, barley and cottonseed oilcake.
Although imposition and easing of special margins are regular exercises by an exchange in consultations with the Forward Markets Commission, such regulatory steps have been in greater scrutiny since March after industry bodies complained of manipulation in guar contracts that gained 120% in just one month.