National Commodity & Derivatives Exchange (NCDEX) has refuted private weather forecaster Skymet’s allegation of impropriety or unfair conduct regarding its plan to partner  with the India Meteorological Department (IMD) to launch the country’s first weather derivatives contracts starting June 1.

According to reports, Skymet had stated that it would legally challenge the NCDEX’s decision to launch the exchange with the IMD. Skymet is quoted as having a three-year-old tie-up with NCDEX to start the country’s first tradable weather index, and that the exchange took “baseline data” from it.

NCDEX, however, said: “The decision to collaborate with IMD for the proposed contract framework was arrived at after careful consideration of operational, institutional, and regulatory factors, including the importance of utilising authoritative sovereign meteorological data sets for exchange-traded products.” .

The exchange stated that it had entered into a limited-term understanding with Skymet in relation to awareness-building and exploratory activities concerning weather-linked products.

“The said arrangement was non-exclusive in nature and has since concluded in accordance with the terms of the memorandum of understanding (MoU) upon expiry of its tenure. Further, the awareness and campaign- related activities contemplated under a separate understanding were discontinued by Skymet and not by NCDEX as is being made out,” the exchange stated in a statement.

The Exchange has acted at all times in a bona fide and transparent manner consistent with its regulatory obligations and institutional responsibilities. “NCDEX believes it would not be appropriate to comment further on specific assertions at this stage,” it stated.

The NCDEX on Wednesday had announced the launch of India’s first Sebi-approved exchange-traded weather derivatives contract, named ‘RAINMUMBAI’, marking the country’s entry into a regulated market for trading weather-linked risks arising from fluctuations in rainfall in Mumbai.

The contract will be launched on May 29, and be available for trading from June 1 to September 30, the period during which the southwest monsoon covers the entire country. Products will be available to retail and high net worth investors, power utilities, logistics firms, and agri-processing businesses, among others.