The National Commodities and Derivatives Exchange (NCDEX), an online multi commodity exchange, will be launching forward trading in maize and sugar contracts with effect from September 25. The exchange has ample experience of having made procurement for various State Governments in these commodities which will be helpful for their above venture.
NCDEX’s Spot Exchange, an arm of NCDEX which conducts electronic spot trading, is currently procuring sugar for the Maharashtra Public Distribution System. It is also procuring sugar in Haryana for the PDS system, while it has bought maize from growers in Karnataka. NCDEX Spot Exchange has procured tur in Gujarat and Karnataka from growers.
The forward contracts are different from futures. Any grade and any variety can be traded under forward trading, whereas in futures the contracts and grade are specified in advance. In forward trading, the quality, grade and other norms, including delivery, are decided between the seller and the buyer while signing a contract. Such a facility does not exist in futures, which is pre-determined.
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