INDIA: NCDEX to raise margins on sugar futures
Published: 08/03/2012, 7:21:21 AM
India's National Commodity and Derivatives Exchange Ltd. will increase the minimum initial margin on sugar and wheat futures, effective Monday, according to Dow Jones.
The NCDEX, which dominates trading of agricultural commodity derivatives in India, said Thursday that it will increase the initial margin on both sugar and wheat contracts to 10%, from about 4.5% for sugar and about 5% for wheat.
Sugar and wheat futures have both risen about 20% in the past one month following weak monsoon rains.
Local commodity exchanges raise trading margins when prices increase sharply during a short period and reduce them once the volatility subsides.
Last month, NCDEX raised trade margins in several other commodities such as soybeans, rapeseed and potatoes.
The state-run India Meteorological Department Thursday lowered its monsoon forecast for 2012 and said June-September monsoon rainfall may be deficient due to the emergence of El Nino weather conditions in the second half of the season.
Monsoon rains and their geographical distribution are critical to the agricultural sector as more than 60% of India's farmland is rain-fed.