With the introduction of a commodity transaction tax (CTT) on non-agri commodities, volumes on commodity exchanges in the first week saw a shift to CTT-exempted agri commodities, as jobbers were testing the agri space after jobbing became costlier due to new tax in non agri space. However, after a week of testing the water, volumes reversed except in maize.
Maize traded on the National Commodity & Derivatives Exchange saw a spike in volumes with the average turnover rising by 347 per cent to Rs 9.17 crore in July, compared to Rs 2.05 crore in June. CTT was implemented from July. However, other commodities have seen a fall in the second week after seeing a spike in the first week. Wheat in the first week saw a 93 per cent spike in average turnover to Rs 14.31 crore but fell to Rs 3.35 crore in the second week. Coriander saw a rise of 62 per cent to 62 per cent in the first week of July to Rs 237.45 crore but fell to 508 million in the second week. Jobbers are playing the wait-n-watch game and gauging the movement of CTT-exempted commodities but have started to try their hand at it to a certain extent and are remaining cautious.
"Traders have started to trade in CTT-exempt commodities as margins have come under pressure due to the levy of CTT. So far, traders are still gauging and playing safe. Currencies was an option out, but since Sebi has imposed restrictions that is also ruled out," said Dharamchand Sethiya, a trader at Kredin Brokerage. "There is a possibility of jobbers entering the agri space but it is not clear yet if they are doing so," said Naveen Mathur, associate director of commodity and currencies at Mumbai-based Angel Broking.