Hedgers’ share still low in turnover of commodity futures exchanges

MUMBAI: The contribution of hedgers to turnover on Indian commodity futures exchanges continues to remain abysmally low, 13 years after the bourses began operations.

Hedging in farm products based on hedge limits sanctioned by an exchange stood at 0.3 per cent as a percentage share of turnover on the country’s largest farm futures bourse, NCDEX, during the nine months through December 2015 (nine months of FY16), Sebi data shows. That means of total agri turnover of Rs 8.25 lakh crore in the relevant period only Rs 2,478 crore was the share of hedgers. Hedging on the bourse as a proportion of turnover was down 57 per cent from the year ago period (but turnover grew 19 per cent).

NMCE, the other agri bourse that’s way smaller than NCDEX, did not provide hedging percentage share. The country’s largest bourse — energy and metals exchange MCX — too has not provided hedger percentage share during the relevant period. But few commodity brokers say that whatever hedging happens does so predominantly on NCDEX.