What It Means
Agri commodities are futures contracts on farm produce, things like chana (chickpeas), soybean, cotton, guar seed, coriander, and turmeric, traded mainly on NCDEX (National Commodity & Derivatives Exchange), India's exchange dedicated to agricultural commodities.
How It Works
Lot sizes vary widely by commodity since they're set in the units that make sense for each crop: soybean trades in 100-tonne lots, chana in 10-tonne lots, while commodities like coriander and castor seed use smaller 5-tonne lots. Agri commodity prices are unusually sensitive to factors that don't affect bullion or energy contracts: monsoon rainfall, the government's Minimum Support Price (MSP) announcements, and import-export policy changes can all move prices sharply. Agri commodities are also exempt from Commodities Transaction Tax (CTT), unlike non-agricultural contracts on MCX.