Ncdex - Gamblers safehaven and exporters nightmare

Ncdex(National Commodities derivatives Exchange) Gamblers safehaven and exporters nightmare
Jojan malayil

If you ask me the most dangerous thing you do in the national commodity exchange i will say trading in Ncdex who handles most of the agri commodities futures . The organisation is run by certain numbheaded ex bank officials and new generation MBA!s who has absolutely no knowldge about what you call as domain knowledge.The whole organisation is in the hands of just 10 financially sound broking companies who twists and make the byelaws of the exchange according to thier books , whims and fancies and controls 90% of the volume of the exchange.There is no control over the individual operations of certain members but strictures are put on genuine broking members who follows the norms and never cross the limits.These people operate against all fundamentals of the market and certain times corners a certain commodity because of their muscle and money power.

Just to naarate a very recent incident which happened to us in the recently concluded april 2008 chillies contract 2008 april.We were long and opted for delivery of our 100 mt due to our unfulfilled overseas obligations and the prices offerd to us by ncdex qualty delivered to accredited warehouses of ncdex was much higher than what was traded in the exchange . On the closing day of contract the market hit 2 uppercircuits as sellers were trying to opt out for deliveries as open market prices were much higher.Ncdex came out with a settlement price which they claim they have pooled through their accredited spot monitoring agency Rs 3 lower and settled the contract defaulting delivery anf giving us 21 paise per kilo.We just cant understand the logic of not being allowed the M2 M for us and if a Gambler who would have sold without stocks in the last miniute after paying 2.5% penalities would have walked away 2ith Rs 1.90/- kg and a genuine exporter who would have taken a position in the last day for his unfulfilled overseas obligation would have paid from his pocket Rs 3.05/-kg .

As an exporter who has been hedging overseas commitments in regional exchanges without any problems in the past 28 years is now hit severely both mentally and financially with the lack of domain knowledge of National Commodities and Derivatives Exchange (NCdex) and would warn exporters to keep away from this exchange for their own safety and should promote other exchanges where compulory delivery is compulsory in the liereal meaning of the word and they have systems in place to check so the genuine hedgers are protected.Also would appeal overseas traders who are following the movements in Ncdex pepper and not to waste their time and dont get cheated with the irrevalent quotes which comes which has no relation with the spot market in India.