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Our Bureau

Kolkata. Oct 7

THE NCDEX has received an approval from the Forward Markets Commission (FMC) for launching physical delivery backed furnace oil futures contracts beginning November, this year.

NCDEX sources told Business Line on Friday that along with the regular quarterly contracts, FMC has also allowed the exchange to launch a six monthly contract beginning March, 2006.

Though a common feature in forward trading of other commodities, this would be the first time that such long-term contracts will be launched in energy products segments in the country. NCEDX will seek approval for September contract later.

"Together, the quarterly and six monthly contracts will offer a perfect mix of short and long term hedging opportunities to the corporate sector" a NCDEX spokesperson said.

It may be mentioned that this is also going to be the first physical delivery backed forward contract in the energy sector.

NCDEX is already in talks with a number of large and medium-scale producers and consumers of furnace oil for participation in the forward contract system.

Negotiations are also on with a few logistics providers for warehousing and other necessary infrastructure facilities.

On the suppliers' side, BPCL, which is a major producer of furnace oil in the country, is keen to participate in such trading. The company is currently negotiating an agreement on physical delivery of the product with NCDEX.

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Regional commodity bourses may be allowed to trade in more items

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