Mumbai: The benchmark agri futures index on India’s National Commodity and Derivatives Exchange Ltd (NCDEX) hit its lifetime high on Friday, driven by strong gains in spices, edible oil complex, sugar and maize counters.

The NCDEX Future Agri Index hit 2,165.13 points, but later slid to 2,164.17, up 1.03%.

“Weather is playing a major role. Most of the commodities are near their historic highs,” said Harish Galipelli, head of research with Karvy Comtrade Ltd. The weather department said rainfall was lower in the southern and western states between 1 June and 9 July.

The monsoon is crucial for India’s farm sector, as only 40% of the farms are irrigated in the country.

Many regions of Maharashtra, a major contributor to the country’s oilseed, cotton, pulses and sugar output, saw deficiency of up to 62%. Kerala, the major producer of spices, saw a deficiency in rainfall of up to 39%. “It depends on the demand-supply situation...there’s some supply constraints in some agri commodities at this time,” said Suresh Mantri, senior analyst with Ventura Commodities Pvt. Ltd.

Contracts for cumin seed, turmeric and sugar hit their highs, while those for soya bean, rapeseed and kapaskhali (raw cotton) were trading near their highs.

Reuters

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