03/01/2012 (MSN) -  National Commodity & Derivatives Exchange Ltd (NCDEX), India''s leading agri-commodity exchange, today launched RBD palmolein futures contracts. NCDEX is the only exchange to offer futures trading in RBD palmolein in the country. With a contract size of 1 MT and tick size of 50 paisa, delivery will be for 10 MT at the delivery centre at Kandla. The contracts are designed to attract retail participation, an exchange release said here. Palm oil is one of the major consumed edible oils in India, accounting for 46 per cent of the market. As per industry estimates, India consumes about 30-32 lakh MT of RBD palm oil every year. Standalone demand for RBD palm oil is increasing every year as it is preferred by the packaged food industry and also sees good demand in the form of retail purchases due to its cost-competitiveness vis-a-vis other edible oils. The volatility in prices of RBD, which is the largest traded edible oil in India, makes price risk management very important for value chain participants. Large importers of CPO may hedge themselves against international exchanges, but small traders of RBD palmolein are exposed to price movements. Additionally, the lack of perfect correlation between Indian prices and Malaysia/Indonesia prices makes risk management even more challenging for those with exposure in India.

The NCDEX RBD palmolein contract will provide an ideal hedging tool for the trade, the release said. "The RBD palmolein futures contract has been designed to benefit value chain participants, whilst providing them with a single platform for price discovery and risk management," NCDEX Chief Business Officer Vijay Kumar said.