THE country's top two commodity exchanges, MCX and NCDEX, have imposed special margin on sugar futures in an attempt to curb volatility in prices of the sweetener at the futures market. The measure has been taken on the direction of the commodity market regulator Forward Markets Commissions (FMC) sources said.
The FMC was recently asked by the committee of secretaries (COS) to watch the movement in sugar prices in the futures market and take necessary steps to curb excessive speculation. According to an NCDEX circular, the exchange has imposed 5% special margin on long positions of all running contracts of sugar except for contract expiring in August 2009.
After the imposition the total special margin levied on sugar will be 10% on the long side on all contracts except for August, which will remain at 15%. Similarly the MCX has fixed 10% special margin on both M and S grade of sugar traded on the exchange, the MCX circular said.
Special margin is effective on both the exchanges from Monday. Special margins are announced so that unnecessary volatility is curbed to maintain healthy price movement in the market, an analyst with Hyderabad-based commodity brokerage, Karvy Comtrade said.
Last week, the COS reviewed sugar prices and decided not to ban futures trading in sweetener for the time being. Sugar prices in the country have increased to Rs 27-28 per kg in retail markets from Rs 18-20 a kg last year.
The FMC was recently asked by the committee of secretaries (COS) to watch the movement in sugar prices in the futures market and take necessary steps to curb excessive speculation. According to an NCDEX circular, the exchange has imposed 5% special margin on long positions of all running contracts of sugar except for contract expiring in August 2009.
After the imposition the total special margin levied on sugar will be 10% on the long side on all contracts except for August, which will remain at 15%. Similarly the MCX has fixed 10% special margin on both M and S grade of sugar traded on the exchange, the MCX circular said.
Special margin is effective on both the exchanges from Monday. Special margins are announced so that unnecessary volatility is curbed to maintain healthy price movement in the market, an analyst with Hyderabad-based commodity brokerage, Karvy Comtrade said.
Last week, the COS reviewed sugar prices and decided not to ban futures trading in sweetener for the time being. Sugar prices in the country have increased to Rs 27-28 per kg in retail markets from Rs 18-20 a kg last year.
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