In a first, BSE to launch futures contracts on almonds on June 22

The Bombay Stock Exchange (BSE) will introduce futures contracts on almonds in the commodity derivatives segment on June 22, the first of its kind in the country. The move is on the back of its successful launch of options contract on spot gold prices.

BSE is getting ready to consolidate its position in the commodity derivatives segment with a set of new contracts. According to sources, the exchange also has plans to launch futures trading in steel in the coming months.

"We are planning to launch the almond contract on June 22. It will be the first of its kind in the country,” a source close to the development told Moneycontrol. Although this market is small, BSE looks for hedging from importers and consumers.

"This is the right time to launch almonds contracts. The crop is in the farming stage and will reach the market by September end, when the festive season starts in the country," another BSE source pointed out.

Of late, India has emerged as the top importer of almonds in the world. While California almonds have more than 75 percent market share, as much as 18 percent comes from Australia. The country’s domestic production is limited to the hill states of Jammu and Kashmir and Himachal Pradesh.

India's total consumption is around one lakh metric tonnes, which is mainly filled with imports.

The BSE's almond contracts will take the reference rate of Navi Mumbai APMC and per lot would be one metric tonne.

"As the income of the Indian middle class is increasing and people are becoming more health-conscious, the demand for almonds is expected to increase. With the new facility, producers and large importers can hedge their positions on the exchange," an official said.

BSE is getting ready to launch steel billet contracts next month. While the steel contract was first launched by Indian Commodity Exchange Limited (ICEX), it was not successful due to bad timing. When the contract was launched, steel prices were in a downward spiral and traders were in doubt.

"BSE has the potential to gain market in the steel segment, as India is the third-largest steel producer, according to the World Steel Association data,” a market observer noted.

BSE has inked an MoU with Steel Users Federation of India (SUFI) and the contract will be called SUFIBILT (SUFI Billets). SUFI has more than 2000 members across India. Nikunj Turakhia is the president of the association. The exchange may take market reference of Raipur and the trading unit could be 10 metric tonnes.

After the launch of options on goods contracts like Gold Mini and Silver kg, BSE has emerged as the second-largest exchange for commodities in India, as far as turnover is concerned. It is also the first Indian exchange to incorporate negative pricing in Brent crude oil contracts in its trading system.