Which among the following is India’s first agricultural Futures Index for trading in agricultural products?

The correct answer is AGRIDEX.

Key Points

• AGRIDEX is India's first agricultural Futures Index introduced for trading in agricultural products.
• It was launched by the National Commodity and Derivatives Exchange (NCDEX) in May 2020.
• AGRIDEX is designed to track the performance of the top 10 liquid agricultural commodity futures traded on NCDEX.
• The index includes products such as soybean, mustard seed, guar seed, chana, and others, providing a benchmark for agricultural commodity trading.
• The index value is derived using a weighted methodology based on liquidity and trading volume of the selected commodities.

Additional Information

• Commodity Futures Trading:
  • Commodity futures are contracts to buy or sell a specific quantity of a commodity at a predetermined price on a future date.
  • This trading mechanism helps in price risk management and acts as a price discovery tool for participants.
• NCDEX:
  • The National Commodity and Derivatives Exchange (NCDEX) is India's leading commodity exchange, established in 2003.
  • It specializes in agricultural commodity futures trading and aims to create a fair and transparent platform for farmers and traders.
• Index Futures:
  • Index futures are derivative instruments that allow traders to speculate or hedge based on the performance of an index, such as AGRIDEX.
  • They are used to manage portfolio risk and provide liquidity to the market.
• Importance of Agricultural Indexes:
  • Agricultural indexes like AGRIDEX help in benchmarking commodity performance, aiding decision-making for investors and policymakers.
  • They provide insights into market trends and help ensure better price realization for farmers.