First special grade castor-oil has been chosen as the basic/underlying variety for the international futures with an option to deliver commercial grade at a discount. The number of delivery contracts would be six in a year and the unit of trading has been denominated at 5 metric tonnes.

The unit of price quotation will be in rupees per 10 kilogram (the government has suggested currency denomination in US $ ).

Daily clearing system will also be set-up. The exchange is in the process of finalising memorandum and articles of association and bye-laws for the proposed Prime Commodity Clearing CorporationOf India (PCCCI) to guarantee the performance of futures contract in terms of both settlement and payment of clearing dues as well as eliminate the counter-party risk in case of failure to honour obligations.

The set of the proposed bye-laws will be circulated to the members of the exchange for their consideration before final adoption through extra-ordinary general meeting (EGM).

He further stated that the total potential for castor-oil futures in the international exchange is of the order of Rs 22,560 crore of which Rs 15000 crore will account for the Indian production.

The Indian crop of castorseeds is about 8 lakh tonnes which produces around 3 lakh tonnes of castor oil. This is 2/3rd of the total world supply of castor oil of 4.7 lakh tonnes.

Based on the recent price trends, the average castor oil BSS price for the last two months, works out to more than Rs 480 per 10 kilogram. Since the total world production is 4.7 lakh tonnes the value of global production works out to Rs 22560 crore, hestated.

While commenting on the new crop prospect he stated that the country will be able to easily achieve the official target of 270 lakh tonnes of oilseeds production fixed for the oil year 1998-99 (November to October).

He expressed concern at the growing demand of edible oils in the country and said that even with such a large projected output, there will still remain a considerable gap between demand and supply which will have to be met through imported oils.