The National Commodity and Derivatives Exchange Ltd. (NCDEX) has recently announced a strategic partnership with Skymet Weather Services. This collaboration aims to study the impact of weather on agricultural commodities and manage the potential risks associated with price fluctuations. This move is set to revolutionize the way we approach climate change and its impact on agricultural production and price volatility.
As per a Memorandum of Understanding (MoU) between the two companies, this collaboration aims to mitigate the effects of climate change on agricultural production and price volatility. The partnership is set to bring about a paradigm shift in how we understand and respond to weather patterns and their impact on agricultural commodities.
Arun Raste, MD & CEO of NCDEX, emphasized the partnership’s goal of providing farmers with insights into changing weather dynamics. The focus lies on educating market participants about the relationship between weather patterns and agricultural commodities. The collaboration is set to empower farmers with knowledge and tools to better adapt to changing climate conditions and manage their agricultural practices accordingly.
Jatin Singh, MD & Founder of Skymet Weather Services, echoed similar sentiments. He highlighted the importance of tools like weather derivatives for managing weather risks in agriculture. Singh also stressed the need for tradable weather indices as effective hedging mechanisms. This could provide a breakthrough in managing the uncertainties associated with weather patterns and their impact on agriculture.
The partnership between NCDEX and Skymet Weather Services is envisioned to provide accurate weather predictions to stakeholders, including farmers and traders. This will help them in better decision-making and risk management. Skymet Weather Services, under this partnership, will provide daily weather updates and forecasts. These will be instrumental in assessing how weather patterns might affect agri-commodity prices.
Information about the weather will be disseminated to market participants through NCDEX’s Agri Commodity Prices (ACP) application. This application offers data on the prices of agricultural commodities. It will now also include detailed weather updates, providing a comprehensive tool for market participants.
The partnership between NCDEX and Skymet Weather Services is expected to enhance the efficiency of the agricultural commodities market. It aims to improve risk management and foster transparency, making the market more resilient and adaptive to changing weather patterns. This could mark a significant milestone in managing climate change impacts on agriculture, ensuring food security, and promoting sustainable agricultural practices.
