The National Multi Commodity Exchange is planning to launch turmeric futures of Erode variety soon.

NMCE Vice President Poonam Gupta told reporters that the exchange has already applied to the Forward Markets Commission for clearance start futures contracts in Erode variety of turmeric.

"As soon as the regulator approves our proposal, we will launch futures in turmeric on our platform," Gupta said.

India is the largest producer and consumer of turmeric in the world. Nearly 90 per cent of turmeric is produced in India. The major turmeric producing states are Andhra Pradesh, Tamil Nadu, Orissa, West Bengal, Karnataka, Gujarat, Maharashtra and Kerala.

NMCE officials said the exchange is starting futures in the Erode variety of turmeric because Erode in Tamil Nadu contributes about 17 per cent of India's total turmeric production of 51 lakh bags (75 kg each).

The exchange has fixed a trading and delivery of 10 tonnes. The quotation would be based on per quintal basis ex-Central Warehousing Corporation inclusive of the value added tax. The price band is fixed at 3 per cent of the last traded price and 6 per cent of the last closing price in either direction.

The exchange proposes squaring up of positions between 17th and 20th of every month as the contracts would expire on 20th.

The compulsory delivery contract would ensure the limit at 3000 tonnes and 9000 tonnes for clients and members respectively.

In the last one decade, turmeric production in India has been fluctuating. Turmeric production in 1990-91 was at 3.92 lakh tonnes, 7.07 lakh tonnes in 1993-94 and 7.196 lakh tonnes in 2000-01. The production in 2002-03 was recorded at 5.82 lakh tonnes and 6.78 lakh tonnes in 2004-05.

This year, turmeric industry estimates a total production at 51 lakh tonnes as against 46 lakh tonnes last year.