The National Commodity and Derivatives Exchange (NCDEX) on July 5, 2021, launched India’s first sectoral indices in the agri-commodities space namely GAUREX and SOYDEX.
“GUAREX and SOYDEX are the country’s first sectoral indices in the agri-commodities space,” said Mr. Arun Raste, CEO and Managing Director, NCDEX.
Initially, both the indices will be launched on the NCDEX website that will gauge the performance of the Soy and Gaur complex. The methodology document for both indices is currently available on the exchange’s website. The futures trading in these indices will be made available in due time.
What is GAUREX?
• GUAREX is a return-based index. It will track the price movement in the futures contracts of its guar gum refined splits and guar seed on a real-time basis.
• The weightage of guar gum refined splits will be 36.57 percent and guar seed will be 63.43 percent.
What is SOYDEX?
• SOYDEX will follow the price changes in futures contracts of refined soy oil and soybean.
• The weightage of refined soy oil will be 32.08 percent and soybean will be 67.92 percent.
What benefits will GUAREX and SOYDEX offer?
• GUAREX and SOYDEX will offer a lot of opportunities to value chain participants regarding risk management exercises and trading strategies.
• After the launch of futures trading in these indices, portfolio managers and professional traders will be able to enjoy excellent pair trade opportunities in the space of spreads and arbitrages.
Perfect products for hedgers, why?
• GUAREX and SOYDEX are cash-settled contracts hence these indices are perfect products for hedgers who are on a constant lookout for low-cost products. SEBI’s cross margin benefit will further offer a significant reduction in the transaction when using GAUREX and SOYDEX.
Any other existing return-based index?
• NCDEX in May 2020 had launched AGRIDEX which was a return-based composite index that tracks futures price movement across 10 commodities on NCDEX.
• AGRIDEX has recorded a 40 per cent return within one year of its operations.
About National Commodity and Derivatives Exchange (NCDEX)
• NCDEX, incorporated as a public limited company on April 23, 2003, is a leading agricultural commodity exchange in India. The Exchange began its operations on December 15, 2003.