NCDEX to launch CERs futures trading

Mumbai: National Commodity and Derivatives Exchange Ltd will launch futures trading in Certified Emission Reduction (CERs) on April 10.

NCDEX is the first exchange in any of the developing countries of the world to launch a futures contract for carbon credit issued under United Nations Framework Convention on Climate Change on its Exchange Platform.

MCX has futures trading in Carbon Emission Allowances. The allowances for carbon emissions allocated to developed countries up to their target level under the Kyoto Protocol. These allowances are tradable under Kyoto’s international emission trading mechanism in place from 2008 to 2012. Each AAU equates to one tonne of CO2e.

India will account for 14.69 per cent of the expected annual number of CERs from the registered projects under Clean Development Mechanism (CDM) of the United Nations Framework Convention on Climate Change (UNFCCC).

Of the 978 projects that are registered under CDM, 332 are from India. Another 543 projects are in pipeline at various stage of validation or registration. By 2012 all these projects from India are expected to yield around 400 million CERs.

In the developed world futures contract of CERs are traded on Nordpool, European Climate Exchange - ICE , European Energy Exchange - Eurex, and NYMEX’s Green Exchange.

Mr Narendra Rathore, Vice-President – Product Group, NCDEX said: “CER prices on NCDEX will be in tandem with the international markets. Physical delivery of CERs will also be facilitated where specific delivery requirements of the buyers and sellers will be matched for guaranteed deliverable CERs.”

Spot Exchange:

NCDEX Spot Exchange Ltd will launch spot trading in coffee, soyabean, and steel ingots by April-end.

Mr P.H. Ravikumar, Managing Director, NCDEX, said: “There were a few technical glitches which has been resolved. We will hit the market by this month end.”

Earlier the online spot exchange arm of NCDEX had launched spot trading in sugar (S-30 grade) in December.

The power exchange initiative is expected to go live in August, he added.

Inflation concern:

Commenting that the government move to scrap import duty on edible oil, Mr Ravikumar said: “The market had expected it in the Budget. The importers should consider shipping soyabean rather than in oil form.”