NCDEX Launches RAINCHNNAI Weather Derivatives Contract for Chennai's Northeast Monsoon

Key facts

• NCDEX launched RAINCHNNAI, a rainfall-based weather derivatives futures contract for Chennai's Northeast Monsoon, on August ularly 31.
• The contract is based on the Cumulative Deviation Rainfall (CDR) model, which tracks deviation of actual rainfall from the Long Period Average (LPA) at Chennai's Meenambakkam and Nungambakkam stations.
• The contract months are September, October, November and December, covering the Northeast Monsoon rainfall regime.
• The contract has a tick size of 1 mm, a lot multiplier of Rs 50 per mm, a maximum order size of 50 lots, and a minimum initial margin of 10%.
• The contract is cash-settled, with rainfall data sourced from India Meteorological Department (IMD) surface rainfall observations at the Meenambakkam and Nungambakkam stations.
• The initial daily price limit is 6%, with an enhanced slab of 3% and an aggregate daily price limit of 9%.
• RAINCHNNAI expands NCDEX's monsoon risk management framework introduced earlier with RAINMUMBAI, India's first exchange-traded weather derivatives contract, developed in collaboration with IIT Bombay.
• The Northeast Monsoon accounts for nearly 70% of Chennai's annual rainfall.
• RAINCHNNAI and RAINMUMBAI together cover both Southwest Monsoon (June-September) and Northeast Monsoon(September-December), completing India's rainfall risk management ecosystem.