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Finance Minister Arun Jaitley launches India’s First Agro Options Contract in Guar Seeds

Finance Minister of India Arun Jaitley on Sunday introduced options trading in guar seed on the commodity bourse NCDEX and stated that the new activity will profit agriculturists and guarantee better costs in the coming days.

Higher production has prompted fall in costs of some agri-items in a few spots, he stated, including that alternatives exchanging is one of the significant strides towards removing ranchers from this circumstance.


NCDEX is the second biggest exchange after MCX to start options trading in commodities. In October 2017, MCX had propelled gold options. Guar seed is the principal agri-commodity options.

Option Market are derivatives which give a purchaser the privilege however not the commitment to purchase or offer a fundamental resource or instrument at a particular cost at the latest a specific date.

“I trust this activity will give colossal advantage to agriculturists in the coming days,” Jaitley said at the launch of the event.

Commending the commitment of ranchers, he said they have investigated every possibility to serve the country. They have endeavored to turn a sustenance deficiency nation to a surplus at this point. Notwithstanding, because of higher generation, they are presently looked with falling costs, he said.

“We find in a few places the issue of falling costs in view of higher production cost. Farmers are not getting the cost for their produce.

Many advances have been taken over the most recent couple of years to remove farmers from this circumstance. There has been some effect,” he stated, including that alternatives exchanging is a stage toward that path.

Before all else, choices exchanging may resemble a little advance yet when its mindfulness increments in the coming days, it is will profit farmers, he included.

Talking on the event, NCDEX MD and CEO Samir Shah stated, “The option trading is a powerful tool to hedge price risks…we are confident that this will boost the development of the agri-commodity market.”
Options will shield farmers from descending cost development and in addition give them a chance to offer their create at higher costs if there should arise an occurrence of cost increment, he said.

NCDEX propelled guar seed options as it is a standout amongst the most fluid contracts on the trade stage. Around 1.5 million farmers are related with this commodity.

“This is fractional satisfaction of the Budget declaration. We are expecting more. I trust the Finance Minister will declare more for this area to convey forward the development,” NCDEX Chairman Rabi Narayan Das said.

Niti Aayog member Ramesh Chand, Nafed Managing Director Sanjeev Kumar Chadha and also senior finance ministry and Sebi authorities were available at the occasion.

As indicated by NCDEX, three choices contracts in guar seed that will lapse in February, March and April of this current year have been made accessible for trading.

While market regulator Sebi had enabled trades to introduce options in September 2016, it was just on April 26, 2017 that it cleared up that the options would have futures as underlying for settlement.

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